ENERGY firm BP is to receive $740m from the sale of interests in Algeria to Statoil, Norway's largest oil company.

The agreement gives Statoil half of BP's stake in the In Amenas project in south-east Algeria and 49 per cent of its interest in the In Salah project, which is 746 miles south of Algiers.

The two gas projects - Algeria's third and fourth largest - are still in development as part of joint ventures with Sonatrach, the Algerian national oil and gas company.

In Salah will produce its first gas next year, with In Amenas due to follow in 2005.

The In Salah project includes seven gas fields, as well as processing facilities and 360 miles of pipeline towards the coast, from where the gas is expected to be exported to southern Europe.

The In Amenas project includes four gas fields as well as processing facilities, and is expected to produce nine bill-ion cubic meters of gas a year, which will be pumped to Italy and Spain.

Both projects are covered by contracts between BP and Sonatrach and the sale will require agreement from both Sonatrach and the Algerian regulatory authorities.

Tony Hayward, BP's chief executive of exploration and production, said: ''We are pleased to bring Statoil into these projects and look forward to working with them and Sonatrach to bring the projects on to production in 2004 and 2005.''