BP deal does rival Shell a favour

12 April 2012

BP has inadvertently done a big favour for arch-rival Shell by agreeing to sell a parcel of upstream oil assets to Petro-Canada for US$2bn (£1.43bn).

Shell's 34%-owned Australian affiliate Woodside Petroleum wanted to buy the business, sold as part of BP's $2.4bn on purchase of a controlling stake in Veba Oil from Germany's E.ON.

This would almost certainly have required Woodside to make a substantial share placing, diluting Shell's stake and cutting its chances of making a successful bid for the Australian oil and gas group.

E.ON has a put option requiring BP to buy the remaining 49% of Veba for $2.4bn cash after 1 April.

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