BP completes Devon energy transaction in major Azerbaijani oil project

BP today announced the completion of its purchase from Devon Energy of an additional interest in the BP-operated Azeri-Chirag-Gunashli (ACG) oilfield development in the Azerbaijan sector of the Caspian Sea, the company reported.  

"This is an important step which follows our announcement in March 2010 of a broad-ranging deal between BP and Devon Energy of which the Azerbaijan component has now been completed. The acquisition of the additional interest in Azerbaijan is part of BP's commitment to the Caspian region as a core strategic area where we already hold a strong position and intend to enhance this significantly in the future," said Rashid Javanshir, president of BP Azerbaijan.

"Another equally important example of this intention is the Heads of Agreement (HOA) which we recently signed with SOCAR in Baku to define the basic commercial principles for a new production sharing agreement to jointly explore and develop the Shafag and Asiman offshore block in the Caspian," Javanshir added.

Devon Energy's 5.63% stake in the ACG development will be split between BP (3.29%) and the following parties which have exercised preferential rights in relation to the transaction - Chevron (0.99%), Inpex (0.96%) and Itochu (0.38%).

The additional interest acquired from Devon will increase BP's operating interest in the ACG development to 37.43% and those of Chevron, Inpex and Itochu to 11.27%, 10.96 per cent and 4.30% respectively, with the remaining interests held by AzACG (a subsidiary of SOCAR, the State Oil Company of the Azerbaijan Republic - 10%), Statoil (8.56%), Exxon (8.00%), TPAO (6.75%) and Hess (2.7%).

On March 11 BP announced a broad-ranging deal, in which BP agreed to pay Devon Energy $7.0 billion in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. The Azerbaijan element is the third to be completed so far, following completion of acquisition of assets in the Gulf of Mexico and the sale of a 50% stake in BP's Kirby oil sands interests in Canada. The purchase of assets in Brazil has yet to be completed.


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