Brazil’s Petrobras is buying 22 million bbl of oil reserves and 267 Bcf of gas reserves in Argentina from Devon Energy for $90 million. About 75% of the reserves are classified as proved undeveloped. The properties produced 6,100 b/d of oil and 17 MMcf/d of gas net to Devon’s interest during the first six months of 2002. The transaction, which is subject to Argentine regulatory approvals, is expected to close by the end of the year.

“This agreement to sell our Argentine assets follows the $262 million sale of our Indonesian business in April,” said Devon CEO J. Larry Nichols. “After the sale of [the assets in] Argentina is completed, Devon’s international operations will be focused on our oil development projects in China and Azerbaijan and on high impact exploration projects offshore West Africa and Brazil.”

Devon is divesting noncore assets, particularly foreign assets inherited in its recent acquisitions, in order to pay down its debt. Devon bought Mitchell Energy, Santa Fe Snyder and Anderson Exploration in the past year for a total of about $8.7 billion, excluding $2.6 billion in debt assumption.

Although the company still plans to sell some processing units in the United States and Canada in the third quarter, the sale of the Argentine unit, called Petrolera Santa Fe, represents the company’s last major asset sale of the year, Nichols said recently.

Last month Devon closed on the sale of oil and gas properties in the U.S., Canada and Indonesia for $1.06 billion, exceeding its goal of selling $1 billion in noncore properties.

The company’s intends to focus on several important drilling plays in the U.S. and Canada this year and is expecting 5% production growth. Its 2002 exploration and production budget is about $1.4 billion, with $830 million of that targeted for the U.S., $520 million for Canada and $85 million for other countries.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.