A unit of BP plc is said to be close to completing a joint venture (JV) agreement with privately held Lewis Energy Group that would expand the London-based producer’s U.S. natural gas operations.

According to published reports, the JV in the Eagle Ford Shale of South Texas is worth at least $160 million. It is to be officially announced Tuesday, when BP CEO Tony Hayward hosts a strategy update for the financial community. A BP spokesman told NGI he could not comment.

Lewis Energy Group, based in San Antonio, employs around 350 people and focuses its core operations in South Texas. The private explorer claims to be the most active producer in Webb, LaSalle and Dimmitt counties. Rodney R. Lewis, the CEO and president, founded the company in 1983. The company also has operations in Colombia as well as Mexico.

Sources said BP wants to take a half-stake in 80,000 acres in the Eagle Ford play for $4,000-4,500/acre.

If the rumors are correct, it would not be the first time BP has taken a bet on domestic shale plays. BP is one of the leading gas producers in the United States, currently supplying an estimated 4% of total U.S. consumption of natural gas. It also is the largest natural gas marketer in North America, according to NGI‘s rankings of U.S. and Canadian gas marketers.

In mid-2008 subsidiary BP America Inc. agreed to pay Chesapeake Energy Corp. $1.75 billion in cash to acquire a stake in 90,000 net acres in the Arkoma Basin of the Woodford Shale (see Daily GPI, July 18, 2008). Two months later BP and Chesapeake formed a JV and BP paid Chesapeake $1.9 billion to acquire a 25% interest in some Fayetteville Shale assets (see Daily GPI, Sept. 3, 2008).

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