BP to sell $1.9 bn Colombian biz to Ecopetrol-Talisman

Embattled British energy giant BP today announced the sale of its oil & gas business in Colombia to a consortium of Ecopetrol and Talisman in a cash deal worth $1.9 billion.

BP will receive a total of $1.9 billion in cash from Colombian national oil company Ecopetrol and Canada's Talisman for a 100 per cent stake in BP Exploration Co (BPXC), its wholly-owned subsidiary that holds BP's oil and gas exploration, production and transportation interests in Colombia, the statement said.

The sale, which is subject to regulatory and other approvals, is expected to be completed by the end of the year.

"I am delighted with the price we have achieved for these assets. BP has been involved in Colombia for more than 20 years and played a major role in finding and developing the country's major oilfields. But it now makes sense for the assets to go to owners more willing than BP to invest in their future development," BP Group Chief Executive Tony Hayward said.

This sale is part of BP's plan, announced on July 27, to divest up to $30 billion of assets over the next 18 months.

Under the terms of the agreement, Ecopetrol and Talisman will initially give BP a cash deposit of $1.25 billion, with the balance due on completion of the sale, the statement added.

BPXC has interests in five producing fields in four association contracts, four separate pipelines and two offshore exploration blocks in Colombia.

Net proved reserves total some 60 million barrels of oil equivalent (boe) and BPXC's net production is approximately 25,000 boe a day.

BPXC employs approximately 470 staff and it is expected that the majority of the staff would be assimilated by the new owners, the statement said.

Meanwhile, this agreement does not affect BP's Castrol lubricants business and other downstream oil activities in Colombia.

BP Plc posted a mammoth loss of $17.15 billion in the second quarter this year, due to the impact of soaring costs related to the Gulf of Mexico oil spill.

On July 20, BP had announced the sale of assets in the US, Canada and Egypt to Apache Corporation for a total of $7 billion.

The company had also informed governments in Pakistan and Vietnam that it intends to divest its upstream interests in those countries.