2010-10-19-2010-10-18

To by upstream busineses and associated interest in Venezuela and Vietman, gaining 40,000 BOE/d, total reserves 270 MMBOE.

BP Plc, London, (NYSE: BP) plans to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP for $1.8 billion. Russia's third largest oil company, TNK-BP is a 50-50 subsidiary of BP and the AAR Consortium, which comprises Alfa Group, Access Industries and Renova.

In Venezuela, BP's interests include a 16.67% stake in the PetroMonagas SA heavy-oil joint venture in the Orinoco basin, a 40% interest in the Petroperijá SA joint venture; and a 26.67% interest in the Boquerón SA joint venture, all of which are operated by Venezuela's state oil company Petróleos de Venezuela SA, or PDVSA. BP's total net production from Venezuela is some 25,000 barrels of oil equivalent per day (BOE/d).

In Vietnam, the assets include a 35% operating interest in the offshore block 06.1, which contains the Lan Tay and Lan Do gas fields; a 32.67% interest in the associated Petrovietnam-operated Nam Con Son gas pipeline; and a 33.3% interest in the joint venture that owns and operates the 739MW Phu My 3 power plant in Baria Vung Tau province. BP's current net entitlement to production from Vietnam is approximately 15,000 BOE/d.

BP's net booked reserves associated with its assets in Venezuela and Vietnam total some 270 million BOE. The company has a staff of 140 in Vietnam and a staff of 35 in Venezuela, the majority of which will transfer to TNK-BP.

The asset sales are part of BP's divestment plan to raise as much as $30 billion by year-end 2011 to help the company meet its financial obligations arising from its recent Gulf of Mexico oil spill. BP has already announced plans to sell assets in Egypt and in North America to Apache Corp., Houston, (NYSE: APC) for $7 billion, and to sell its Colombian exploration, production and transportation business to Calgary-based E&P company Talisman Energy Inc. (NYSE; Toronto: TLM)and Ecopetrol SA, Bogota, Colombia, (NYSE; Toronto: EC; ECP) for $1.9 billion.

BP group chief executive Bob Dudley says, "Today's agreement is further evidence of the rapid progress BP is making towards the divestment target we set out in July. These are robust businesses which offer both existing production and potential opportunities for future growth. We believe they will offer TNK-BP a solid foundation as it builds its business outside Russia."

TNK-BP CEO Mikhail Fridman adds, "The acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP's strategic expansion in the global energy market. Our company's ambitious yet highly focused and disciplined diversification provides TNK-BP with an excellent platform for further growth and profitability, while also helping develop new competencies that can be applied at home. Given Russia's strong relationships with Vietnam and Venezuela, we are sure that this transaction will create significant value both for TNK-BP and our local partners."

TNK-BP will pay BP a total deposit of $1 billion on Oct. 29, with the balance of payment due on completion of the sales. The purchase of the assets will be funded by TNK-BP and will not require capital from the company's shareholders. BP will retain an economic interest in these assets through its 50% interest in TNK-BP.

Both sales are expected to close in the first half of 2011. The agreement does not affect BP's other business activities in Vietnam, including a significant lubricants blending and marketing business, nor in Venezuela.

Lexicon Partners is advisor to TNK-BP's board; Credit Suisse is advisor to TNK-BP management; and Goldman Sachs is advisor to BP.

TNK-BP is Russia's third largest oil company and owns close to 50% of Russian oil and gas E&P company Slavneft. TNK-BP accounts for approximately 16% of Russia's production, including its share of Slavneft. As of December 2009, the company's proved reserves were roughly 8.6 billion BOE.