BP Plc's Russian unit, TNK-BP, agreed to pay $485 million (€374 million) to Occidental Petroleum Corp. to take full ownership of a Siberia-based oil producer.
TNK-BP will buy 50% from Occidental in their joint venture Vanyoganneft, which is pumping about 45,000 barrels a day of crude, TNK-BP said yesterday in an e-mailed statement. Occidental expects to report a gain of about $400 million (€308.5 million) when the transaction is completed in the first quarter, the Los Angeles-based company said in a separate statement yesterday.
Occidental, the fourth-largest US oil company, owned half of the joint venture since 1992, according to a statement on the company's Web site. „We got an excellent price. It was not a core region for us, it was the only operation we had in Russia,” Larry Meriage, an Occidental spokesman, said yesterday in a telephone interview. „Our assets our concentrated in the US, the Middle East and Latin America.”
Occidental in October acquired US oil and natural-gas fields for $865 million (€667 million) from Plains Exploration & Production Co. Last month, the company was part of two groups awarded oil-drilling rights in Libya by the African country's government. TNK-BP approached Occidental about selling the stake in Vanyoganneft late last year, Meriage said without elaborating.
Vanyoganneft, located in western Siberia, held about 189 million barrels of proved oil and gas reserves and 1.4 billion barrels of proved, probable and possible resources as of December 31, 2005, TNK-BP said. The license governing the joint venture's output expires in 2013, though the license can be renewed by the Russian government, Occidental said in its statement. BP's 50% share of output from TNK-BP averaged 930,000 barrels a day in the Q4, the London-based company estimated on January 9.
BP is Europe's second-biggest oil company by market value after Royal Dutch Shell Plc. Shares of Occidental fell 5 cents to $43.08 in New York Stock Exchange composite trading. BP's stock rose 7.5 pence, or 1.4%, to 537 in London. Exxon Mobil Corp., Chevron Corp. and ConocoPhillips are the three largest US oil companies by market value. (Bloomberg)