BP in £4.7bn deal for oil exploration off Brazil

BP today spent £4.7 billion to buy 10 oil exploration areas off Brazil, as well as deep-water sites in the Gulf of Mexico and further interests in the Caspian Sea.

It is buying the assets from US oil group Devon Energy, and in exhange will sell the firm a 50% stake in its Kirby oil sands interests in Alberta, Canada, for $500 million and creating a joint venture to develop the field.

BP chief executive Tony Hayward said the deal was a major coup which gave the firm seven deep-water sites in the "prolific" Campos basin and a major portfolio of deep-water exploration interests in the Gulf of Mexico.

It will help BP meet its goal of growing production at 1% to 2% a year in the next decade.

"This strategic opportunity fits well with BP's operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil," said Hayward.

"As well as giving us a broad portfolio of assets in the exciting Brazilian deep waters, it will strengthen our position in the Gulf of Mexico, enhance our interests in Azerbaijan and enable us to progress the development of Canadian assets."

Analysts said it was hard to tell if BP paid a good price as the size of reserves in some of the fields were unknown and would only come to light once explored.