BP in South American venture with Argentina's Bridas

A BP logo is seen at a petrol station in London, Britain January 15, 2015. REUTERS/Luke MacGregor/File Photo

(Reuters) - British oil major BP BP.L has agreed to merge its interests in South American oil company Pan American Energy (PAE) with refiner and fuel retailer Axion Energy in a new joint venture with Axion's owner and PAE partner Bridas Corporation.

BP and Bridas, an Argentine energy company 50 percent-owned by China's CNOOC 0883.HK, will hold equal stakes in the newly merged Pan American Energy Group (PAEG) after a cash-free deal that is expected to close early next year, the companies said.

The two companies will be represented by four board directors each, sharing nomination rights for senior executives.

The self-funded joint venture will include PAE’s production of 262,000 barrels of oil equivalent per day and its interests in the sought-after Vaca Muerta shale region.

It will also contain Axion’s 90,000 barrel per day Campana refinery in Argentina and its network of more than 755 fuel retail sites in Argentina, Uruguay and Paraguay.

“We see value-enhancing opportunities throughout PAEG’s businesses; from extending the life of mature production and developing new unconventional resources including Vaca Muerta to growth in retail fuels and lubricants marketing,” BP Chief Executive Bob Dudley said.

Reporting by Karolin Schaps; Editing by David Goodman