BP, the British oil giant that operates at the energy industry, had decided to increase production by getting an asset of oil and gas in Brazil. Therefore BP had paid $7 billion to Devon Energy. Because of this transaction BP gets access to the sought-after area off the coast of Brazil. Analysts expect that this area will have a great potential for oil discoveries. BP isn’t the first one that penetrates this area; other rivals like Exxon Mobil already have accessed the area because of partnerships.
It is a good deal for both sides. Because of the sell of its offshore and international oil and gas assets, Devon can focus on its less expensive businesses in the United States and in Canada. BP gets the chance to increase production and profitability. Last year, BP already produced more oil and gas than Exxon for the first time.
BP is very impassioned about the deal. They see different benefits. First of all it offers a long term growth based on high-margin oil. Secondly it will give them a broad portfolio of assets in the deepwater of Brazil. And it also will intensify their position in the Gulf of Mexico.
Brazil became more important concerning oil and gas. Some industry experts see Brazil as the new battleground for big oil companies. Brazil knows a great economical growth the last few years. Brazil isn’t a poor country, but the prosperity is very disproportionate. There are a lot of social problems in the countries. But I think this deal is really good for Brazil. BP has more than enough resources to invest large sums of capital in development of the oil blocks. They are able to withstand years of investment in technology and exploration.
http://www.nytimes.com/2010/03/12/business/global/12bp.html?ref=energy-environment
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