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BP, Bridas to merge PAE and Axion Energy in Argentina

EBR Staff Writer Published 12 September 2017

BP has entered into an agreement with Bridas to combine their stakes in the oil and gas producer Pan American Energy (PAE) and the refiner Axion Energy (Axion) in a cash-free transaction.

The new company Pan American Energy Group (PAEG) will become one of the largest privately-owned integrated energy companies operating in Argentina.

While BP and Bridas will equally own the joint venture, there will be no payments for the equity exchange.

Currently, the stakes held BP and Bridas in PAE are 60% and 40%, respectively, while Axion is wholly-owned by Bridas.

The combined company is expected to align the PAEG shareholders’ interests across the upstream and downstream value chains in Argentina, Uruguay and Paraguay.

BP Group chief executive Bob Dudley said: “Supported by the combined skills and expertise of BP and Bridas, this new integrated business will be able to pursue growth and development opportunities in Argentina, Uruguay, Paraguay and Mexico.”

The new company is anticipated to get benefitted from BP’s global upstream technical and downstream marketing experience as well as Bridas’ deep operating knowledge.

The combination could also result in further integration synergies, as the Axion refinery is already a primary customer for PAE’s Argentine crude oil production.

With a daily production of around 262,000 barrels of oil equivalent (boe) in 2016, PAE is Argentina’s second largest producer of oil and gas.

PAE owns stake in Argentina’s four main hydrocarbon basins, including operating Cerro Dragon, Argentina’s largest oil field.

Besides, it operates the Hokchi block in the shallow water Mexican Gulf of Mexico.

Axion Energy owns and operates Campana refinery, located north of Buenos Aires, with a 90,000 barrels of oil a day (b/d) refining capacity.

The transaction is subject to regulatory filing or approval in several jurisdictions.

It is expected to be completed in early 2018.


Image: BP's world headquarters in St. James's, City of Westminster, London. Photo courtesy of WhisperToMe/Wikipedia.