BP will sell its 34.3 percent interest in the Yacheng natural gas field in the South China Sea to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $308 million as part of its ongoing global portfolio optimization.
BP China President Chen Liming said BP remains committed to work with China to contribute its deep expertise and oil and gas supply options in this emerging market.
BP served as operator of the field, which began commercial production in 1996, until 2004, when major protect partner CNOOC took the helm as operator. CNOOC will continue as operator with 51 percent interest following completion of the sale. Kuwait Foreign Petroleum Exploration Company will hold 49 percent interest.
Yacheng 13-1, located approximately 62 miles (100 kilometers) south of Hainan Island in 295 feet (90 meters) of water, is the largest natural gas field producing offshore China. BP was awarded interests in the 42/05 and 43/11 deepwater blocks in the South China Sea in 2010 and 2012, where exploration work is underway.
The sale, expected to close in the second half of 2013, will raise BP's total divestments announced since 2010 to $37.8 billion. Earlier this month, the company announced it would sell its non-operated interest in the Sean gas field in the UK North Sea to SEE Plc for $288 million in cash.
BP's highly successful divestment program is about fundamentally reshaping and repositioning the company's upstream portfolio, said BP Group Chief Executive Robert Dudley in the company's third quarter earnings statement Oct. 30.
"It gives BP a differentiated competitive position which plays to our strengths in exploration, deepwater fields, giant fields and gas value chains. It is also biased to oil, which we believe has higher returns potential," Dudley said.
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