BP pays $7bn in deal to hunt for oil in Brazilian waters

Updated: 06:30 EST, 11 March 2010

BP has agreed to buy Brazilian, Azeri and Gulf of Mexico assets from Devon Energy for $7billion, as the U.S. producer refocuses on onshore U.S. fields.

The companies said on Thursday that BP has also agreed to sell Devon a 50 per cent stake in its Kirby oil sands interests in Alberta, Canada, for $500million.

The deal gives BP the entry into Brazil which Chief Executive Tony Hayward has long eyed.

Devon announced its asset sale programme in November, saying it hoped to pull in as much as $7.5bn for its international and Gulf of Mexico assets as it looks to focus on its onshore oil and gas fields in North America

However, Devon's assets are in the Campos basin, rather than the Santos basin where most excitement is focused after multi-billion barrel discoveries in recent years.

Devon announced its asset sale programme in November, saying it hoped to pull in as much as $7.5billion for its international and Gulf of Mexico assets as it looks to focus on its onshore oil and gas fields in North America.

The company has already sold its interest in three deepwater development projects in the Gulf of Mexico for about $1.3billion.

BP is also buying around 240 leases in the Gulf of Mexico, including Devon's 30 per cent interest in the major Kaskida discovery, in which BP already has a 70 percent stake.

BP is also adding to its existing interest in the Azeri-Chirag-Gunashli oilfield off the coast of Azerbaijan.

Devon's 5.6 per cent stake will increase BP's interest in ACG, which produces 820,000 barrels of oil a day, to nearly 40 per cent.

The parties will form a 50-50 joint venture to develop the 90,000 net acres of oil sands at Kirby, and this will be operated by Devon.