The $7 billion (£4 billion) sale of BP’s 60 per cent interest in Pan American Energy to Bridas Corporation has collapsed, the company has announced.
The deal had been delayed because the Argentine anti-trust and Chinese regulatory approvals required to complete the transaction had not been obtained by Bridas, BP said.
Under the terms of the agreement, Bridas had exclusive responsibility for obtaining the approvals. After 1 November 2011 if all of the necessary conditions were not yet satisfied, each party had the right to terminate the agreement at any time without notice.
Bridas already owns 40 per cent of Pan American Energy (PAE). The deal did not include the shares of PAE E&P Bolivia Ltd.
BP will now repay the deposit of $3.53 billion it received at the end of 2010—at the time when the deal was agreed—which it had held as short-term debt.
BP said it is no longer in discussion with Bridas regarding the transaction, and that it is happy to return to long-term ownership of the assets, given the considerable improvement in its own financial strength and circumstances, as well as the improved external trading environment.
BP said it initially agreed the sale of its interest in PAE as an early element of its divestment programme to strengthen its balance sheet. Since June 2010, excluding the PAE assets, BP has agreed asset sales totalling over $19 billion, it said.
“In October 2011, BP announced that it intended to extend its divestment programme to $45 billion by the end of 2013,” the company said in a statement. “BP’s current divestment programme is focused on the sale of non-strategic assets and not driven by a requirement to raise cash. As such, BP does not currently plan to divest additional assets to offset proceeds which would have been received from the PAE transaction.”
