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By Isabel Ordonez Of DOW JONES NEWSWIRES HOUSTON (Dow Jones)--BP PLC (BP) said Tuesday it has agreed to sell assets in the U.S., Canada and Egypt to Apache Corp. (APA) for a total of $7 billion in cash. The deal will help BP finance the mounting costs of cleaning up the Gulf of Mexico oil spill, and allows Houston-based Apache to expand its presence in regions where it already has operations. The transaction follows BP's move last month to set up a $20 billion compensation fund for spill liabilities. This fund will be financed by BP cutting three-quarters of its dividend and selling $10 billion of non-core assets. Earlier Tuesday, BP said it plans to sell its gas fields and a pipeline in Vietnam, as well as assets and exploration licenses in Pakistan. BP "believes that there are opportunities to divest assets which are strategically more valuable to other parties than they are to BP," Chairman Carl-Henric Svanberg said in a prepared statement. "Today's announcement is the first such transaction and meets the value and strategic criteria of both parties." Press reports in recent weeks have flagged that BP was in talks with Apache over an asset deal, though these were focused on the British oil giant's considerable Alaska holdings, which weren't included in Tuesday's deal. BP will sell Apache its Permian Basin assets in Texas and southeastern New Mexico in the U.S., its western Canada natural-gas exploration and production assets and the Western Desert business concessions and East Badr El-din exploration concession in Egypt. "This transaction provides a sustainable growth platform for Apache's onshore North America operations as well as strategic infrastructure and exploration potential in Egypt," G. Steven Farris, Apache's chairman and chief executive said in the release. These assets are a good fit for Apache because the company already has core business operations in these areas, said Fadel Gheit, analyst at Oppenheimer & Co. in New York. "On the other hand, BP doesn't have a big presence in any of these areas so they are smart to monetize marginal assets." Apache has specialized in acquiring and rehabilitating declining oil and gas fields that no longer fit in the portfolios of its peers. Earlier this year Apache bought the shallow-water Gulf of Mexico assets from Devon Energy Corp. (DVN) for $1.05 billion. Shares of Apache closed 3.3% higher at $88.28, while BP's U.S.-listed shares closed down 1.5% at $35.20 apiece. -By Isabel Ordonez, Dow Jones Newswires; 713-547-2094 isabel.ordonez@dowjones.com Order free Annual Report for Apache Corp. Visit http://djnewswires.ar.wilink.com/?link=APA or call 1-888-301-0513 Order free Annual Report for BP plc Visit http://djnewswires.ar.wilink.com/?link=BP or call 1-888-301-0513 (END) Dow Jones Newswires July 20, 2010 17:15 ET (21:15 GMT)