BP said to be close to Brazil approval for Devon deal

BP Plc, whose stock lost a third since the biggest US oil spill, may win approval for its $3.2 billion purchase of Devon Energy Corp’s Brazil assets as soon as this month, a top lawyer at the nation’s oil regulator said.

The London-based company meets the “technical” requirements to operate offshore Brazil where eight of the 10 blocks BP plans to buy from Devon are located, said Tiago Macedo, general counsel for the National Hydrocarbons Agency.

“The approval of BP, relating to Devon, is technically authorized — the only thing missing is the formal approval of this transfer,” Macedo said in an interview late yesterday in Rio de Janeiro, where the agency is based. “There should be no impediment to BP giving continuity to these contracts.”

The ANP, as the regulator is known, has reviewed BP’s operational and financial capabilities for over a year and asked the company for additional documentation after the spill at the offshore Macondo well in the Gulf of Mexico. The two companies originally expected the deal to close last year. BP London-based spokesman Mark Salt declined to comment on the timing of the approval process.

BP rose 85 pence, or 0.2 per cent, to 475.70 pence as of 2:49 pm in London, after earlier rising to as much as 476.70 pence.

Devon’s blocks are in up to 8,150 feet (2,484 meters) of water in the Campos basin, compared with 5,000 feet at Macondo. The Devon purchase would give BP oil fields in a country that plans to double production by 2020 as it develops the largest discoveries in the Americas since Mexico’s Cantarell in 1976.

‘Good News’
“It’s good news in that there is another highly reputable source endorsing BP,” Jason Gammel, an analyst at Macquarie Capital Europe Ltd. in London said today in a telephone interview. “It suggests that the industry overall has faith in BP to be stronger moving forward. The Campos basin is highly prospective, so it’s a nice asset for the portfolio.”

Oklahoma-based Devon sold all of its offshore and international assets last year to focus on production in the U.S. and Canada. The Polvo field Devon operates in shallow waters of the Campos Basin produced 12,265 barrels a day in January.