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UK’s oil giant BP (LSE:BP.) is one step closer to its US$38 billion divestiture programme as the company announced it is giving up its southern gas assets in the North Sea for US$400 million.
Europe’s second largest oil company, BP has been selling off assets since 2010, to fund costs resulting from the most expensive oil spill catastrophe in the Gulf of Mexico.
Divestment Plans
But the official statement from BP read “the divestment of SGA is part of BP’s strategy to develop a more focused North Sea business in the UK and Norway.”
BP currently has a $10 billion five-year investment programme, including four major projects in the UK and two in Norway.
“Together with our partners BP is currently progressing projects in the UK offshore that will involve a total investment of £10 billion over the next five years – representing the highest level of annual investment BP has ever made into the UK’s offshore industry,” said Trevor Garlick, Regional President for BP North Sea.
BP initially declared in February 2011 that the company is selling its southern gas assets, which produce 25,000 barrels of oil equivalent per day (boepd).
The buyer, privately-held oil and gas company Perenco UK Ltd, is the largest operator in the Southern North Sea, operating five offshore fields, pipelines, and gas terminals.
Perenco’s Intentions
Perenco, which has already made an initial payment of $100 million, will acquire three stream fields, Cleeton, West Sole, and Amethyst, as well as the Dimlington Terminal, and the Hessle Office, once it completes payment of $300 million by the end of the year.
This is Perenco’s second acquisition of BP’s interest, the first being the 50.1% stake in Wytch Farm, the largest onshore oilfield in Europe, for $610 million.
“We are very pleased to have reached this agreement with BP. It marks a natural extension of our UK North Sea portfolio and plays to Perenco’s core strength of maximising the value of mature fields,” Perenco UK Ltd’s General Manager Eric Faillenet commented in a press statement.
BP assured the jobs of employees working for SGA, saying those will be carried on along with the transfer of ownership.
“Perenco is committed to investing in and developing SGA beyond BP’s plans, ultimately providing a longer-term future for the assets and the people who work there.”
Perenco further added they “look forward to welcoming the BP team into Perenco and to many years of further production from these assets.”
Company Overview
BP shares fell 6.75 pence, of 1.4%, to 475.15 pence a share on the London Stock Exchange at 3:00 PM GMT, following the news.
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