BP (NYSE:BP) Approved by Venezuela to Sell Oil Assets

In an attempt to raise up to $30 billion to pay for liabilities related to the Gulf of Mexico oil spill, BP (NYSE:BP) is trying to sell assets in Venezuela, and they've been given approval by the government to go ahead with the process.

The assets held in Venezuela include an interest in heavy oil and minority stakes in two exploration and production ventures with state-owned oil company PDVSA.

Combined it is estimated BP should be able to raise up to $1 billion from the assets. Although a relatively minor deal in comparison with others, it is one of the bigger challenges for the company to divest of.

The only two companies considered a buyers for the stakes are PDVSA itself, and possibly the joint venture of BP with Russia called TNK-BP. The Russian connection would make it more palatable to Venezuela.

BP holds a 50 percent stake in TNK-BP, which also has interests in Vietnam and Algerian assets held by BP.

BP (NYSE:BP) Venezuela Assets Not Officially For Sale Yet

About a week ago BP (NYSE:BP) let Petroleos de Venezuela SA (PDVSA) Vice President Eulogio del Pino know it was interested in selling its stakes in the Boqueron and Petroperija oil fields and the heavy oil-upgrading project of Petromonagas.

This is part of the initiative by BP to raise up to $30 billion to help pay the costs related to the Macondo oil spill in the Gulf of Mexico.

Evidently Rafael Ramirez, president of PDVSA, the Venezuelan state-owned oil company, but also the oil and energy minister of Venezuela, wants the assets badly, and noted BP hasn't officially requested permission to sell the Venezuelan assets.

Authorization is needed, and it seems that authorization must come from Ramirez.

BP wants to sell the assets to its Russian joint-venture partner, TNK-BP.

Strategically that's not a bad move, as Venezuela would be more apt to sell to a Russian partner than possibly any other partner.

The three projects account for the production of about 130,000 barrels a day.