ARGENTINA: PAE-Axion Merger To Form Country's Biggest Private Oil Company
British Petroleum (BP) announced an agreement with Bridas Corporation to form a new integrated energy company combining its interests in the Pan American Energy (PAE) oil and gas producer and Axion Energy (Axion) refining and marketing company.
The new corporation, Grupo Panamericano de Energ?a (PAEG), would be the largest integrated private energy company operating in Argentina. The transaction requires regulatory approval in several jurisdictions. The company expects a final agreement in early 2018.
PAEG owners will be BP and Bridas Corporation, a joint venture between Bridas Energy Holdings of Argentina and CNOOC Limited of China. Currently, PAE is currently owned 60% by BP and 40% by Bridas, while Axion is wholly-owned by Bridas. There will be no payments for the equity exchange.
PAE is Argentina's second largest producer of oil and gas. It had daily production in 2016 of around 262,000 barrels of oil equivalent (boe), or approximately 18% of Argentina's total oil and gas production. It has interests in Argentina's four main hydrocarbon basins, including operating Cerro Dragon, Argentina's largest oil field, and interests in the prospective Vaca Muerta shale. PAE also operates the Hokchi block in the shallow water Mexican Gulf of Mexico.
Axion Energy owns and operates the 90,000 barrels of oil a day (b/d) refining capacity Campana refinery north of Buenos Aires, has over 750 retail sites in Argentina, Uruguay, and Paraguay, and also has material lubricant and aviation fuels businesses.
“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,” said Bob Dudley, BP Group Chief Executive.