Courtesy of Benzinga.
BP (NYSE: BP), Europe’s second-largest oil company, may find it difficult to raise its dividend after its plan to sell its stake in Argentina’s Pan American Energy to China’s Cnooc (NYSE: CEO) for $7.1 billion collapsed this weekend.
Cnooc, China’s largest offshore oil explorer, was looking to purchase BP’s Pan American stake through its Argentine unit, Bridas Corp. The deal was announced last year as part of BP’s plan to sell $30 billion in assets to raise cash for expenses tied to the Gulf of Mexico oil spill.
In recent weeks, it appeared that the deal might collapse as BP waited on regulatory approval for the transaction to proceed. The transaction had a Nov. 1 deadline. In a filing with the Hong Kong stock exchange, CNOOC said Bridas Energy sent BP a letter on November 5 to terminate the deal, Reuters reported.
Following news of the deal falling apart, BP said it no longer need to sell the Argentine assets and the company noted its financial position is stronger today than it was when the deal was announced.
BP said it’s “happy to return to long-term ownership of these valuable assets, given the considerable improvement in its own financial strength and circumstances, as well as the improved external trading environment,” according to the Wall Street Journal.
When BP recently reported its third-quarter results, the company said a dividend hike was possible sometime next year and that it had raised its assets sales target to $45 billion.
