BP to sell stake in China gas field to Kuwait

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British oil giant BP said on Wednesday that it had agreed to sell its stake in China’s Yacheng gas field to the state-owned Kuwait Foreign Petroleum Exploration Company (KUFPEC) as part of a divestment program.

“BP today announced that it has agreed the sale of its 34.3-percent interest in the Yacheng gas field in the South China Sea to KUFPEC for $308 million (232 million euros) cash,” they explained in a statement.

The transaction is expected to close in the second half of next year, however it is subject to regulatory oversight and third-party approvals.

BP managed the field until the 1st of January 2004, when it handed operations over to its major project partner CNOOC, the Chinese state-owned energy giant.

The deal holds that KUFPEC will own 49 percent of the partnership and CNOOC will hold a majority 51-percent stake.

The Yacheng gas field supplies natural gas for power generation to Castle Peak Company Limited in Hong Kong via a 780-kilometre pipeline. Additional natural gas and other products such as condensate are sold to customers on Hainan Island.

BP’s latest disposal comes as the company seeks to sell $38 billion worth of assets by the end of 2013.

The aim is to raise funds to help pay the cleaning up and compensation bills charged to BP after the US Gulf oil spill disaster in 2010.

BP added on Wednesday that the latest sale takes its total divestments to $37.8 billion since 2010.

“This sale is part of BP’s ongoing global portfolio optimization,” added BP China president Chen Liming in Wednesday’s statement.

“BP remains committed to working with China to contribute its deep expertise and oil and gas supply options in this important emerging market,” he added.

On Monday BP announced a deal to sell its 50-percent stake in the Sean gas field, located in the North Sea, to British energy firm SSE for $288 million.