BP said to be in talks with Chinese firm over sale

BP IS reported to be in talks with China's third-largest oil company over the sale of its Argentinian business for £6.3 billion.

The group is understood to be in discussions with China National Offshore Oil Corporation (CNOOC), China's largest offshore oil explorer, over its 60 per cent stake in Argentina's Pan American Energy.

BP is keen to offload assets to help it meet the costs of the Gulf of Mexico oil spill. It said last week the clean-up bill had risen to US$11.2bn (7.1bn). It is also setting up a 20bn compensation fund. BP has assets worth more than 200bn, but it plans to sell around 10 per cent of these by March next year.

Pan American Energy is the largest crude oil exporter and the second largest crude oil producer in Argentina. CNOOC already holds a 20 per cent stake in the company. Chinese energy firms are keen to buy up oil and gas resources to ensure the country has enough fuel to support its rapidly growing economy.

BP is understood to be involved in talks over offloading its Vietnamese and Venezuelan oil and gas assets for 1.2bn to its Russian joint-venture firm TNK-BP. It is also thought that the group hopes to raise 680 million through selling its oil and gas exploration and production operations in Pakistan.

The explosion at the Deepwater Horizon well on 20 April killed 11 workers and caused an estimated 4.9 million barrels of oil to gush into the sea - the largest offshore spill in history.

However, despite the mounting costs, the group cheered investors earlier this month when new chief executive Bob Dudley, who took over from embattled boss Tony Hayward, hinted that it would resume dividend payments next year.