) made plans to divest its share in the Crossfield Gas Storage
). The transaction, scheduled to close by the first quarter of
2013, will fetch C$210 million to the British oil giant.
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The deal covers 40% of the interest BP holds in properties of the
Crossfield Gas Storage facility as well as stakes in a marketing
joint venture entity − CrossAlta Gas Storage & Services Ltd −
between BP and Crossfield. The transaction comprises BP's base
gas in the facility, all of its mineral interests in the
Crossfield area that include ownership interest in the Elkton
production unit and associated surface land.
Situated about 50 kilometers (or 31 miles) north of the City of
Calgary, the Crossfield facility has a natural gas storage
capacity of 68 billion cubic feet. This unit transports gas from
West to East Canada, and to California and the Pacific Northwest.
Meanwhile, in a separate release, BP also agreed to sell its
liquefied petroleum gas (LPG) distribution business in Poland to
). However, the companies declined to comment on the financial
aspect of the transaction. Last year, this operation distributed
over 150 million gallons of LPG to the residential, commercial,
autogas, and wholesale segments.
BP remains busy in reshaping its portfolio through the divestment
of smaller non-core properties to pay spill-related costs, while
holding onto potential big resources. Although this move will
likely hurt the company's performance in the near term, it is
expected to benefit the oil giant eventually over the long haul.
The company is set to divest around $38 billion worth of assets
Recently, BP made its largest ever criminal settlement with the
federal authorities regarding the catastrophic 2010 Macondo well
oil spill. The agreement with the U.S. government calls for the
payment of $4.5 billion by the British oil giant to resolve all
criminal charges leveled by the Department of Justice and all
claims by the Securities and Exchange Commission. It can now
focus on the remaining civil claims as well as on more upstream
BP, UK's second largest oil company by market value after
Royal Dutch Shell Plc
), carries a Zacks #3 Rank, which is equivalent to a Hold rating
for a period of one to three months. We also maintain our
long-term Neutral recommendation on the company.