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Businessreview
Disposals
• InJuly2010,BPannouncedthatithadenteredintoseveralagreements
tosellupstreamassetsintheUS,CanadaandEgypttoApache
Corporation(andanexistingpartnerthatexercisedpre-emptionrights).
Thedeals,togetherworthatotalof$7billion,compriseBP’sPermian
BasinassetsinTexasandsouth-eastNewMexico,US;itsWestern
Canadianupstreamgasassets;andtheWesternDesertbusiness
concessionsandEastBadrEl-dinexplorationconcessioninEgypt.
Thesetransactionswerecompletedduring2010.
• On3August2010,BPannouncedthatithadagreedtosellitsoiland
gasexploration,productionandtransportationbusinessinColombiato
aconsortiumofEcopetrol,Colombiasnationaloilcompany(51%),and
TalismanofCanada(49%).ThetwocompaniesagreedtopayBPatotal
of$1.9billionincash,subjecttocustomarypost-completionprice
adjustments,for100%ofthesharesinBPExplorationCompany
(Colombia)Limited(BPXC),thewholly-ownedBPsubsidiarycompany
thatheldBP’soilandgasexploration,productionandtransportation
interestsinColombia.FollowingtheapprovaloftheColombian
authorities,completionoccurredon24January2011.
• On31August2010,BPcompletedthesaleofitsentireinterestinthe
Overthrustassets(PainterComplexGasPlant,PainterReservoirUnit
andWhitneyCanyoneldandinletfacility)toMeritEnergyCompany
for$217million.
• O n18October2010,BPannouncedithadreachedagreementtosell
itsupstreambusinessesandassociatedinterestsinVenezuelaand
VietnamtoTNK-BPforatotalof$1.8billionsubjecttocustomary
post-completionpriceadjustments.TheagreementincludesBP’s
interestsinthePetroperijá,BoquerónandPetroMonagasjointventures
inVenezuelaand,inVietnam,BP’s35%operatinginterestintheLan
TayandLanDogaselds(Block6.1)andassociatedpipelineandpower
generationinterests.Block6.1partners,PetroVietnamandONGC
VideshLtd,havewaivedpre-emptionrightstopurchaseBP’sBlock6.1
interest.BPwillretainaneconomicinterestintheseassetsthroughits
50%interestinTNK-BP.
• InOctober2010,BPannouncedithadreachedanagreementwithits
partner,HessCorporation,forthesaleofa20%interestintheTubular
BellseldintheGulfofMexico.Hessagreedtoacquirethe20%
interestfromBPfor$40millionandbecametheoperator.The
increasedownershipbroughtHess’sworkinginterestinTubularBellsto
40%.Chevronholdsa30%interestandBPretains30%.TubularBells,
whichwasdiscoveredin2003,isadeepwatereldapproximately135
milessouth-eastofNewOrleans,Louisiana.
• On25October2010,BPannouncedthatithadreachedagreementto
sellitsrecentlyacquiredinterestsinfourmatureproducingdeepwater
oilandgaseldsintheUSGulfofMexicotoMarubeniOilandGasfor
$650million.BPacquiredtheinterestsintheelds–Magnolia,
Merganser,NansenandZia–fromDevonEnergyearlierin2010as
partofthewideracquisitionofassetsintheGulfofMexico,Brazil
andAzerbaijan,butdeterminedthattheydidnottwellwiththerest
ofthegroup’sassetsintheregionandwouldbeofmorevalueto
anothercompany.
• On28November2010,BPannouncedthatithadenteredintoan
agreementtosellitsinterestsinPanAmericanEnergy(PAE)toBridas
Corporation.PAEisanArgentina-basedoilandgascompanyownedby
BP(60%)andBridasCorporation(40%).BridasCorporationwillpayBP
atotalof$7.06billionincashforBP’sinterestinPAE.Thetransactionis
expectedtobecompletedin2011.Thetransactionexcludestheshares
ofPAEE&PBoliviaLtd.Completionofthetransactionissubjectto
closingconditionsincludingthereceiptofallnecessarygovernmental
andregulatoryapprovals.
• On14December2010,BPannouncedthatithadreachedagreementto
sellitsupstreamassetsinPakistantoUnitedEnergyGroupfor
$775million.Subjecttocertainclosingconditions,includingthereceipt
ofallnecessarygovernmentalandregulatoryapprovals,closingis
anticipatedtooccurbytheendoftherstquarterof2011.
• During2010,BPalsoannounceditsintentiontodivestitsinterestinthe
TuscaloosaeldsinLouisiana,theWattenbergplantinColoradoandits
NGLbusinessinCanada.
• On22February2011,BPannounceditsintentiontosellitsinterestsina
numberofoperatedoilandgaseldsintheUK.Theassetsinvolvedare
theWytchFarmonshoreoileldinDorsetandallofBP’soperatedgas
eldsinthesouthernNorthSea,includingassociatedpipeline
infrastructureandtheDimlingtonterminal.BPaimstocompletethe
disposalsaroundtheendof2011,subjecttoreceiptofsuitableoffers
andregulatoryandthirdpartyapprovals.Theassetsdonotyetmeet
thecriteriatobereclassiedasnon-currentassetsheldforsaleanditis
notyetpossibletoestimatethenancialeffectoftheseintended
transactions.
ThefollowingdiscussionreviewsoperationsinourExplorationand
Productionbusinessbycontinentandcountry,andlistsassociated
signicanteventsthatoccurredin2010.Whererelevant,BPspercentage
workinginterestinoilandgasassetsisshowninbrackets.Workinginterest
isthecost-bearingownershipshareofanoilorgaslease.Consequently
thepercentagesdisclosedforcertainagreementsdonotnecessarily
reectthepercentageinterestsinreservesandproduction.
Europe
UnitedKingdom
BPisthelargestproducerofhydrocarbonsintheUK.Keyaspectsofour
activitiesintheNorthSeaincludeafocusonin-elddrillingandselected
newelddevelopments.
• InJuly2010,theUKParliament’sEnergyandClimateChangeSelect
Committeelaunchedaninvestigationintothesafetyofdeepwater
drillingintheUK,inlightoftheaccidentintheGulfofMexico.In
September,BPprovidedbothwrittenandoralevidencetothe
Committee,asdidanumberofotheroperatorsandorganizationswitha
stakeintheUKContinentalShelf(UKCS).
• IntheUK,BPhasbeencloselyinvolvedincommunicatingthelessons
learnedfromtheGulfofMexicooilspilltoindustryandtheregulatory
authorities,andhasalsobeenwidelyrepresentedintheOilSpill
PreventionandResponseAdvisoryGroup(OSPRAG),agroupformedin
lateMaytoco-ordinateandleadtheUK’sresponsetosuchincidents.
BPhasprovidedsupport,forexample,throughthetransferoftwo
containmentdevicestoOilSpillResponseLimited’sSouthampton
depotandbyleadingthedesignandprocurementofacappingstackfor
useinthedeepwateroftheUKCS.Thecappingstackprojectisduefor
completioninmid-2011.
• TheEuropeanCommissionpublisheditspolicyandpre-legislative
communicationonoffshoresafetyinOctober2010.Preparationofa
draftlegislativepackageisnowwiththeEuropeanCommission
services,forexpectedpublicationinspring2011.
• B Pisscheduledtodrilladeepwaterexplorationwellinthewestof
Shetlandduring2011and,togetherwithitsdrillingcontractor,plansto
implementallrelevantlessonsfromtheGulfofMexicoaccidentduring
theplanningandexecutionofthatwell.Muchhasalreadybeendone
during2010intheNorthSeabusinesstofurtherimprovethesafetyof
drillingoperations.
• InOctober2010,BPwasawardedinterestsinsevenoffshore
explorationblocksinthe26throundofUKContinentalShelflicensing.
FiveoftheseblocksareBP-operatedandtwoarepartner-operated.
ThisrepresentsthelargestlicenceawardforBPintheUKformorethan
10years.
• On27October2010,theEuropeanUnionfollowedtheUNandUSin
enactingfurtherrestrictivemeasuresagainstIran(theEURegulations).
TheEURegulationstarget,amongotherthings,legalpersons,entities
orbodiesoutsideofIranthathavedirectorindirectIranianownership.
• On16November2010,productionfromtheRhumgaseldinthe
centralNorthSeawassuspendedpendingclaricationfromtheUK
governmentoncertainaspectsoftheEURegulations.Thisaction
wastakentocomplywiththenoticationrequirementsintheEU
Regulations.RhumisownedbyBP(50%)andtheIranianOil
Company(50%)underajointoperatingagreementdatingbackto
theearly1970s.
44BPAnnualReportandForm20-F2010