HONG KONG/LONDON (Reuters) – BP’s (BP.L) plan to sell a stake in its South American unit for $7 billion (4 billion pounds) has collapsed, potentially trimming the oil major’s cash flow and making it harder to raise its payout to shareholders.
China’s biggest offshore oil producer CNOOC Ltd (0883.HK) said Sunday its 50 percent-owned unit Bridas Energy Holdings has terminated a deal to buy BP’s stake in Argentina-based oil and gas group Pan American Energy LLC (BPPAE.UL) (PAE).
BP hinted at its third-quarter results last month that it would announce an increase in its dividend in early 2012.
However, the failure of the sale of its 60 percent interest in PAE could mean cashflow is lower than might have been expected, making it harder to raise the dividend.
At the results, BP said the deal, initially signed last November, was not as important to the firm’s cashflow today as it was a year ago.
“We reached that agreement last year at a time when oil prices were lower. It was a time when we actually needed to make some divestments of properties. We’re past that point. We don’t actually need to make that divestment….if it doesn’t happen, it’s absolutely fine,” Chief Executive Bob Dudley told
Read More from the Article Source: Full Article
