BP Plc exits China's Yacheng gas field, sells stake to Kuwait

The sale of 34.3 per cent interest in Yacheng gas field, the second announcement this week, takes BP inches away from the USD 38 billion asset disposals target it had planned to bolster finances after setting aside about USD 40 billion to pay for the worst US oil spill.

BP has since 2010 now sold USD 37.8 billion of assets, the company said in a press statement.

It had on Monday announced sale of its stake in the Sean gas field in the UK's North Sea to SSE Plc for USD 288 million.

"This sale (to KUFPEC) is part of BP's ongoing global portfolio optimisation," said Chen Liming, President of BP China. "BP remains committed to working with China to contribute its deep expertise and oil and gas supply options in this important emerging market."

Discovered in 1983, Yacheng 13-1 field is the largest offshore natural gas producing field in China. The field is located in about 90 metres water depth and is some 100 kilometres south of Hainan Island, in the South China Sea.

Commercial production at Yacheng started in 1996. BP operated the field until January 1, 2004, when it handed operatorship to its major project partner CNOOC of China.

CNOOC Ltd operates the field with a 51 percent interest.

The field currently supplies natural gas for power generation to Castle Peak Co Ltd in Hong Kong via a 780-kilometre pipeline. Additional natural gas, condensate and LPG are sold to customers on Hainan Island.

"Following completion, the Yacheng partnership will consist of CNOOC (51 per cent), and Kuwait Foreign Petroleum Exploration Company (49 per cent)," it said.

Subject to regulatory, CNOOC and third party approvals, BP expects the deal to close in the second half of 2013.