BP has agreed to fold its Argentine assets into a new joint-venture backed by Cnooc of China in a deal that widens both groups’ interests in a country boasting some of the most promising shale oil and gas resources outside the US. Pan American Energy (PAE), an Argentine oil and gas producer 60 per cent owned by BP, will be combined with Axion Energy, one of the Latin American country’s largest oil refiners and fuel retailers, to create a new integrated energy group. The new company will be a 50-50 joint venture with Axion’s owner, Bridas Corporation, which is 50 per cent owned by state-controlled Cnooc. Bridas already owns the 40 per cent of PAE not held by BP and Axion is the primary customer for PAE’s Argentine crude oil output. BP said fully integrating the closely-connected businesses would unleash further operational synergies. No cash payments will be made by either party for the equity exchange, which BP said would create the largest private Argentine energy company. PAE accounted for 18 per cent of Argentine oil and gas production last year, with average output of 262,000 barrels a day. It operates the Cerro Dragon oilfield — the country’s largest — and also has positions in the Vaca Muerta shale region. Argentina has been attracting growing interest from global energy groups as a new frontier in the shale revolution, which has unlocked large volumes of oil and gas from “tight” rock formations in the US.