BP: Sale Of Pan American Energy Held-Up Piling Pressure On Bob Dudley

Bob Dudley

First Posted: 02/10/11 16:42 Updated: 02/10/11 16:55   PA

PRESS ASSOCIATION -- The sale of BP's business in Argentina is on the verge of collapse, heaping fresh pressure on chief executive Bob Dudley, it is claimed.

The 7 billion US dollar (£4.5 billion) disposal of Pan American Energy (PAE) is a cornerstone of the group's efforts to rebuild its finances to help it pay for the Deepwater Horizon oil spill in the Gulf of Mexico.

But the Sunday Times said there is a hold-up with the sale as a result of legal wranglings with the buyer and the refusal of authorities to approve the deal.

A source close to the situation told the newspaper that the chances of the deal being done were "at best 50-50".

If the deal were to fall through it would put further pressure on Mr Dudley after the company's failed 16 billion US dollar (£10.3 billion) share swap with Rosneft in Russia earlier this year.

Its shares are still 40% lower than they were before the oil spill and lower than when he took the helm last autumn.

BP owns a 60% stake in PAE, which it wants to sell to Argentinian oil group Bridas and Chinese explorer CNOOC in a deal announced in November.

Bridas has raised several legal issues and could be trying to use BP's weakened position to attract better terms, according to the newspaper.

It is thought that authorities in Buenos Aires may delay the decision until after this month's presidential elections, because handing £4.5 billion to one of the UK's biggest companies would rankle with voters. And the situation has been complicated after a handful of UK companies launched unpopular drilling campaigns in the waters off the Falkland Islands.

BP said: "Deals of this scale take time to finalise with competition authorities - we are working with the other shareholders in PAE to secure competition approvals and complete the deal. We can confirm that the deal has not yet closed as Argentine competition approvals remain outstanding but we remain optimistic that these approvals will be granted in due course."

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Filed by Paul Vale  |