BP Said to Consider Reviving Sale of Alaskan Assets

BP Plc oil transit lines
BP Plc oil transit lines are seen at Prudhoe Bay oil fields in Alaska. Photographer: Kimberly White/Bloomberg

July 23 (Bloomberg) -- BP Plc, battling to contain the worst oil spill in U.S. history, may revive talks to sell some of its Alaskan assets after it failed to reach a deal with Apache Corp. this week, according to two people with knowledge of the matter.

BP has the assets under review, including half its stake in the Prudhoe Bay oil field, said the people who declined to be identified as the details are private. The London-listed company may also move to sell other assets, including fields in Vietnam and Colombia, in coming weeks as bids from potential buyers exceed the company’s expectations, one of the people said.

“They can get a good price,” said Peter Hitchens, an analyst at Panmure Gordon & Co. in London. “National oil companies are always looking to buy. Asset prices are firm.”

BP, Europe’s largest oil producer by volume, this week agreed to sell oil and gas fields in the U.S., Canada and Egypt to Houston-based Apache for $7 billion, raising cash to meet the costs of the Gulf of Mexico spill. BP said last month it would suspend paying dividends, trim capital spending and sell $10 billion of assets to raise cash for the $20 billion fund demanded by President Barack Obama to compensate victims of the oil spill.

A BP spokesman declined to comment today on the prospect for further asset sales.

First Refusal

BP had been discussing the sale of Alaskan assets to Apache. The fields weren’t included in the deal because of the right of first refusal held by BP’s partners in the assets and by a lack of agreement over who would operate them, three people familiar with knowledge of the matter said last week.

BP currently owns a 26 percent stake in Prudhoe Bay. Exxon Mobil Corp. and ConocoPhillips each have a 36 percent stake, with Chevron Corp. holding a 2 percent interest, according to the BP website.

“One of the existing partners would be an obvious choice for a buyer,” said Iain Armstrong, an analyst at Brewin Dolphin Ltd. in London. “Prudhoe Bay is in terminal decline, and BP will be under pressure to go for growth in the next few years.”

BP reports second-quarter results on July 27.

To contact the reporters on this story: Brett Foley in London at bfoley8@bloomberg.net; Brian Swint in London at bswint@bloomberg.net.

To contact the editors responsible for this story: Jeff St.Onge at jstonge@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net.