BP withdraws from CNOOC sale

BP (BP.NYSE, BP.LON) has withdrawn from a deal to sell its US$7.1 billion stake in Argentina’s Pan American Energy to state-owned offshore oil company Cnooc Ltd (CEO.NYSE, 0883.HKG), Bloomberg reported. The proposed buyer, Bridas, which is co-owned by Cnooc and Argentina’s Bulgheroni family, said the deal was canceled due to “legal reasons” and not an announcement the Argentinian president Cristina Fernandez de Kirchner had made ten days prior. Kirchner ordered all energy and mining companies to repatriate their future export revenue in a bid to slow accelerating capital flight from the country. The announcement signals that Kirchner plans to push for more intervention in the private sector, said Eurasia Group analyst Daniel Kerner. BP must repay a US$3.5 million deposit to Bridas by November 14. Bridas would have owned 100% of Pan American Energy had the deal gone through, though it would have been subject to antitrust approvals. The sale was to be part of BP’s plan to divest up to US$45 billion worth of oil fields following the Gulf of Mexico spill last year.