Oil major British Petroleum is set to buy American Devon Energy's assets in Brazil, Gulf of Mexico and Azeri for $7 billion as Devon has decided to stay focused on the home turf, the companies announced on Thursday.

Meanwhile, BP is also selling a 50 per cent stake in its Alberta, Canada-based Kirby oil sands assets to Devon for $500 million and an agreement that both the companies would develop the Kirby field in a joint effort.

It is expected that the oil fields acquired by the UK's second-largest oil company would go a long way in helping the company to meet its target of increasing production at a rate of one to two per cent every year in the next decade. The deal also marked BP's entry to Brazil, a country its Chief Executive Tony Hayward has been eyeing for long.

However, as per analysts it's too early to say whether the price paid by BP is correct or not as there these fields are still under exploration and the exact quantity of oil reserves is still unknown.

In the market place, investors remained almost neutral on the deal.