BP looks at LatAm to pay for spill

The BP oil well disaster has caught the attention of countries like Mexico and Cuba who are worried that their shores could be polluted by wayward crude. With the price tag for the disaster climbing upwards of $3.1 billion dollars, the oil giant is looking for ways to pay such massive costs. One option could be in Latin America.

According to the Wall Street Journal, oil fields in Colombia and Venezuela may be part of the over $10 billion in “non-core exploration and production assets” BP could sell in order to pay for the spill. After helping develop the Cusiana and Cupiagua fields in eastern Colombia in the 1990s BP last week ceded “direct operation” of the lands to local company Ecopetrol. Those fields are between Colombia’s largest and produce 177,000 barrels a day.

The larger asset that could be sold by BP is its 60% stake in Pan American Energy, Argentina’s second-largest oil producer. BP’s stake in the company is valued at $9 billion, which makes it an interesting choice for the company to sell according to one analyst:

“Pan American is the obvious place to start,” said Christopher Wheaton, who manages about $400 million of securities at Allianz RCM’s Energy Fund in London, including BP shares. “It’s got a valuation from (offshore oil producer) Cnooc in mid-March and is one of the assets you could carve out of the portfolio easily”…

Pan-American, a venture created when BP bought Amoco Corp. in 1998, produces about 100,000 barrels of crude oil a day and 450 cubic meters of gas, according to the BP website.

An estimated 30,000 to 65,000 barrels of oil are spilling into the Gulf of Mexico daily and numerous efforts to stop the leak have been insufficient. Tar balls from the spill have reached shores as far away as Texas, while cleanup efforts have been hampered by inclement weather.

Image- CBC (“BP workers in Cocodrie, La., pile booms that have been cleaned and repaired for reuse after they were stained with oil from the spill in the Gulf of Mexico.”)
Online Sources- The Latin Americanist, USA TODAY, Wall Street Journal, Bloomberg, Xinhua, Voice of America, LAHT