BP’s sale of its South American oil company has fallen through after the buyer pulled out citing “legal reasons”. Bridas Corporation sent a letter to BP this weekend to cancel the $7.06billion deal to buy up BP’s 60% stake in Pan American Energy, the second largest producer of hydrocarbons in Argentina.
Bridas, which owns the remaining share of the company, gave no official indication about why it terminated the deal in the letter, but has blamed unspecified “legal reasons” in the South American press.
BP will now return the $3.5billion deposit that Bridas put down on the deal as well as $700million to clear up other issues for a clean slate.
Bridas, half owned by Argentinian firm Bridas Energy Holdings and China’s state oil producer CNOOC, took advantage of a clause in the agreement which meant that after 1 November the deal could be cancelled if certain conditions such as government approval had not been met.
The sale was part of BP’s plan to raise revenue after it had to stump up billions to pay for the compensation and clean up of the disastrous Gulf of Mexico oil spill in April 2010.
A spokesperson for the oil giant said that BP is now in a much better financial position, “so the need for the deal is much lower than it was a year ago.”