BP sells Yacheng gas field to Kuwait company for $308 millionStaff writer ▼ | December 20, 2012
BP agreed to sell its 34.3 per cent interest in the Yacheng gas field in the South China Sea to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $308 million in cash.BP agreed to sell its 34.3 per cent interest in the Yacheng gas field in the South China Sea to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $308 million in cash.
Discovered in 1983, Yacheng 13-1 field is the largest offshore natural gas producing field in China. The field is located in about 90 metres water depth and is some 100 kilometres south of Hainan Island, in the South China Sea. The transaction is subject to regulatory, CNOOC and third party approvals, and BP expects the deal to close in the second half of 2013.
"This sale is part of BP’s ongoing global portfolio optimization. BP remains committed to working with China to contribute its deep expertise and oil and gas supply options in this important emerging market," said Chen Liming, president of BP China. The sale takes BP’s total divestments announced since 2010 to $37.8 billion.
Commercial production at Yacheng started in 1996. BP operated the field until January 1, 2004, when it handed operatorship to its major project partner CNOOC. The field currently supplies natural gas for power generation to Castle Peak Company Limited in Hong Kong via a 780-kilometre pipeline. Additional natural gas, condensate and LPG are sold to customers on Hainan Island.
Following completion, the Yacheng partnership will consist of CNOOC (51 per cent), and Kuwait Foreign Petroleum Exploration Company (49 per cent). BP was awarded interests in the 42/05 and 43/11 deepwater blocks in the South China Sea in 2010 and 2012. These blocks are currently in the exploration phase. ■