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Tuesday, April 23, 2024

BP sells Oman gas stake to PTTEP

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BP Plc. will sell a stake in an Omani gas block to Thailand’s national energy firm for $2.6 billion, part of a push to divest billions of dollars of assets and focus more on renewable energy.

PTT Exploration and Production Public Co. Ltd. (PTTEP) has agreed to pay the sum for 20 percent of Block 61, according to statements from both companies on Monday.

The deal should help BP deliver on its goal of selling $25 billion of assets by 2025 to ease its debt burden. Like other oil majors, it must contend with the demand for crude gutted by the coronavirus. The company has pledged to eliminate most of its greenhouse gas emissions over the coming decades.

In September, BP cut its dividend for the first time in a decade, and its share price plunged to a 25-year low after Chief Executive Officer Bernard Looney announced a shift toward greener energy.

The price of the stake sale iås “attractive” compared with historical transactions, analysts at Bernstein including Oswald Clint wrote in a research note. The sale reinforces their view that BP will start again to buy back shares—a step the company has committed to taking once it trims debt to $35 billion—as early as mid-year.

Deal closing

Block 61 is BP’s biggest asset in Oman and has a combined daily production capacity of 1.5 billion cubic feet of gas and more than 65,000 barrels of condensate, a light form of oil, according to the London-based company.

BP began talks with potential buyers in 2020. The London-based company expects the deal to close this year, after which it will remain the block’s operator and its biggest shareholder with 40-percent ownership.

Of the remainder, Omani state-run firm OQ will hold 30percent; PTTEP, 20 percent; and Malaysia’s Petronas Nasional Bhd., 10 percent. Petronas bought its stake from OQ in 2018.

PTTEP already has investments in Oman, including stakes in Block 6 and Oman’s liquefied natural gas company. It’s expanding in the Middle East; in December, it secured a license to explore for oil and gas off the coast of Abu Dhabi in the neighboring United Arab Emirates. Bloomberg News

Read full article on BusinessMirror

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