News & Events

Plains closes on $5.4B Gulf of Mexico BP deal

Posted by on 26 January 2013

Plains Exploration & Production Co. said Friday that it has completed its $5.36 billion acquisition of some BP deep-water assets in the Gulf of Mexico, as the British oil giant seeks to cover its costs related to the massive oil spill there in 2010.

BP expects to dispose of $38 billion in assets between the beginning of 2010 and 2013. It has so far agreed to sell $37 billion worth of assets.

The company will continue to operation four major production platforms in the region, and hold on to three other hubs that it doesn’t operate. BP, which says it is the largest deep-water leaseholder in the Gulf, predicts that it will invest about $4 billion in the Gulf of Mexico each year over the next decade.

The Obama administration earlier this week put a stop to new federal contracts with BP, admonishing it for a “lack of business integrity” and also disqualifying it indefinitely from winning new leases to drill on taxpayer-owned lands. The company said that the Environmental Protection Agency told it that an agreement that would lead to lifting the suspension is already in the works.

BP faces criminal proceedings and massive civil claims related to environmental damage from the 2010 Gulf spill. The company has so far set aside $42 billion to pay fines and damages resulting from the spill, and that amount may yet grow.

Plains, based in Houston, acquired BP’s interests in three BP-operated properties, the Marlin hub, Horn Mountain and Holstein, as well as BP’s stakes in two non-operated assets, Ram Powell and Diana Hoover. Plains also closed on a $531.2 million acquisition of Shell’s 50 percent working interest in the Holstein Field.