BP sues Bridas on $7 bln S. American deal collapse

Mon Apr 23, 2012 10:40pm IST

Related Topics



* BP sale of stake in Pan American Energy fell apart

* Bridas refusing to waive potential fraud claims-lawsuit

* China's CNOOC owns 50 percent of Bridas

* BP says only owes Bridas a $700 million breakup fee

By Jonathan Stempel

April 23 (Reuters) - BP Plc sued Argentina's Bridas Corp on Monday over a collapsed $7.06 billion asset sale, saying it is willing to pay a $700 million breakup fee so long as it will not face fraud claims arising from its conduct.

The lawsuit stemmed from the November 2011 collapse of BP's plan to sell its 60 percent stake in crude oil producer Pan American Energy to Bridas, which owns the remainder and is Argentina's second-largest oil and gas company. Bridas is half-owned by Chinese oil giant CNOOC Ltd.

According to the complaint filed in U.S. District Court in Manhattan, the sale agreement called for BP to pay the $700 million if Bridas released it from various claims.

The British oil company said it had wired the money after the transaction fell apart, only to have Bridas return it, claiming that the sale agreement was void from the start.

Nonetheless, BP said Bridas later demanded the money "without prejudice to any of Bridas' legal rights or positions."

The Argentine company "is seeking to have it both ways," BP said. "Bridas apparently continues to take the position that it was fraudulently induced to enter into the share purchase agreement and related contracts. That claim is frivolous."

Bridas did not immediately respond to requests for comment. The Buenos Aires-based company had in November blamed "legal issues and the way BP handled the transaction" for the collapse of the sale.

BP is seeking a court order allowing it to pay the fee and effectively put the failed sale behind it.

Alternatively, BP asked that, if the court voids the sale agreement, it also declare that Bridas does not deserve the fee.

BP said the parties had agreed that disputes could be resolved in a New York court.

A sale of the Pan American stake was part of BP's push to sell assets and raise cash to cover expected legal and cleanup costs from the 2010 Gulf of Mexico oil spill.

Chief Executive Bob Dudley told analysts last October that the sale was no longer as important to the London-based company and that it was "absolutely fine" if BP held on to the stake.

CNOOC bought half of Bridas from Argentina's Bulgheroni family for $3.1 billion in March 2010. The brothers Carlos and Alejandro Bulgheroni are together worth $5.1 billion, Forbes magazine said last month.

The case is BP Argentina Exploration Co et al v. Bridas Corp et al, U.S. District Court, Southern District of New York, No. 12-03170.


Fast-tracking Projects


Oil Prices

Oil Prices

Brent edges further above $61 as companies cut upstream investments.  Full Article 

GST Bill

GST Bill

Cabinet clears bill for nationwide goods and services tax.  Full Article 

Aviation Sector

Aviation Sector

Breakingviews: SpiceJet rescue is no fix for India aviation woes.  Full Article 

Global Economy

Global Economy

Fed confident on U.S. growth, opens door wider to rate hike.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Banking Sector

Banking Sector

Japan banks to bulk up India presence on improving ties   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage