BP Returns to Growth With $3.2 Billion in Deals in 3 Days
BP (BP) is back on the acquisition trail and appears determined to make up for lost time, announcing two deals in three days. Shares have gained almost 40% since the beginning of 2016.
The London-based oil giant last Saturday unveiled a roughly $2.4 billion all-share deal for a 10% stake in Abu Dhabi’s largest oil field, then, on Monday, said it will pay $916 million to Dallas-based Kosmos Energy (KOS) for controlling stakes in a handful of deepwater exploration blocks in North West Africa.
The deals are the latest evidence of a renewed confidence at BP, which has spent years offloading some $40 billion assets to help pay for liabilities arising from the 2010 explosion and oil spill at its Deepwater Horizon rig in the Gulf of Mexico, and then in an effort to cut costs and spending as oil prices plummeted more than 50% from mid-2014.
The first signs of a change in policy and renewed confidence came last month when BP approved a $9 billion development of the Mad Dog oilfield in the Gulf of Mexico. That deal was followed late in November by a $375 million agreement to buy a 10% stake in Egypt’s giant Zohr gasfield from Eni (E) of Italy.