BP said it had agreed to sell its stake in Argentina-based oil and gas group Pan American Energy (PAE) to Bridas Corp, half-owned by China's CNOOC, for $7 billion, as it raises cash to pay for the Gulf oil spill.

The planned sale of the 60 per cent interest, which sources previously said was under discussion and which was for a price in line with analysts' estimates, brings to $21 billion the amount that BP has raised, or agreed sales on, in recent months.

BP has said it expects the costs of the Gulf of Mexico oil spill -- the United States' worst ever -- to hit $40 billion and said it would sell assets worth $25-$30 billion by the end of next year to pay for it.

Bridas already owns a 40 per cent stake in Pan American Energy, which BP said was Argentina's second-largest producer of oil and gas.

Bridas was owned entirely by the family of Argentine tycoon Carlos Bulgheroni until CNOOC agreed to buy a 50 per cent stake for $3.1 billion in March.

The 60 per cent stake BP is selling represents reserves of 917 million barrels of oil equivalent (boe) and production of 143,000 boe per day.

The transaction excludes the shares of Pan American's Bolivian unit, BP said.

U.S. oil major Exxon Mobil Corp is seeking to sell its Argentine unit Esso, which controls hundreds of service stations and a refinery, local daily El Cronista reported last month. – Reuters