BP to pay Devon $7 bln for Brazil, GOM, Azeri fields

The companies said Thursday that BP has also agreed to sell Devon a 50 percent stake in its Kirby oil sands interests in Alberta, Canada, for $500 million and that the two companies would form a venture to develop Kirby.

The deal gives Europe's second-largest oil company by market value reserves and highly prospective exploration which will help it meet its goal of growing production at 1 to 2 percent per annum in the next decade.

Analysts said it was hard to estimate whether BP was paying a good price for the assets as they included fields whose reserves are unknown as they are still being explored.

BP shares were unmoved by the deal, falling 0.7 percent against a 0.4 percent drop in the STOXX Europe 600 Oil and Gas index at 8:37 a.m. British time.

The deal also gives BP the entry into Brazil which Chief Executive Tony Hayward has long eyed.

However, Devon's assets are in the Campos basin, rather than the Santos basin where most excitement is focussed after multi-billion barrel discoveries in recent years.

Devon announced its asset sale program in November, saying it hoped to pull in as much as $7.5 billion for its international and Gulf of Mexico assets as it looks to focus on its onshore oil and gas fields in North America.

The company, which felt investors had not ascribed a reasonable value to its Gulf and international assets, has already sold its interest in three deepwater development projects in the Gulf of Mexico for about $1.3 billion.

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