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BP has bought US shale assets in major bid to expand oil footprint

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BP has bought US shale assets for $10.5bn (£8bn) in a move that will expand Britains international oil footprint in onshore basins.

In its largest deal in almost two decades, BP has agreed to acquire a swathe of southern US shale oil and gas assets from global miner BHP.

The firm said it plans to increase the dividend it pays to its shareholders for the first time in four years and would buy back $6bn worth of shares.

However, BP's share price fell more than two per cent following the announcement in early morning trading.

Such an acquisition is fresh evidence of the growing interest in the US shale sector, which many suppliers have invested in as a relatively low-cost alternative to conventional crude oil.

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Bob Dudley, BP group chief executive, described the deal as a "transformational acquisition".

Dudley added: "Given our confidence in BPs future – further bolstered by additional earnings and cash flow from this deal – we are increasing the dividend, reflecting our long-standing commitment to growing distributions to shareholders."

BP will buy the BHP stock which includes some of the richest oil fields in North America, based in regions such as Texas, Louisiana and Arkansas.

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Analysts at London Capital Group said the deal "marks the end of an era for BHP as it gives in to pressure from activist investors Elliott Advisors and sells the site, which it purchased at the height of the oil boom."

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