Plains Exploration And Production is to sell its Gulf of Mexico assets as a fallout of the regulatory backlash caused by the BP oil spill.

The company said it aims to collect about $1bn-$2bn via joint ventures and the sale of its assets in the region, which represent about 30% of its potential reserves of two billion barrels of oil equivalent.

The company’s interests in the Gulf of Mexico include the Blackbeard East, Davy Jones and Blueberry Hill prospects, which are operated by McMoRan Exploration.

Government regulations and rising insurance costs in the aftermath of the US’s largest oil spill are expected to push up drilling expenses, forcing smaller producers to leave the Gulf region.

Plains Exploration and Production chief executive James Flores said the money raised from the Gulf of Mexico asset sales will be invested in onshore operations, reports Reuters.

Exploration and production companies are shifting their focus towards relatively safer onshore projects in the aftermath of the oil spill.