BP Said to Weigh North Sea Asset Sales for $1 Billion

BP Said to Weigh North Sea Asset Sales for $1 Billion
The Sullom Voe oil terminal on the Shetland Islands, operated by BP Plc. Source: Sullom Voe Terminal via Bloomberg

BP Plc, seeking to cover clean-up costs from its Gulf of Mexico oil spill, is weighing the sale of some North Sea assets that may raise as much as $1 billion, according to a person familiar with the matter.

BP may sell some fields and infrastructure in a region where it has operated for more than 40 years, said the person, who declined to be identified because the discussions are private and no decision has been reached. Sheila Williams, a London-based spokeswoman for BP, declined to comment on any North Sea disposals.

“The North Sea remains important to BP globally,” Williams said in a telephone interview. “We intend to be a part of that region for a long time.”

The British oil company is raising capital after the spill at its Macondo well in the Gulf of Mexico left it facing a bill projected to reach $40 billion and cost Chief Executive Officer Tony Hayward his job. BP last month agreed to sell its 60 percent interest in Pan American Energy to Argentinean oil and gas company Bridas Corp. for $7.06 billion, taking asset sales this year to about $21 billion.

BP rose 1.1 percent to 455 pence as of the 4:30 p.m. close in London. The stock is down 31 percent since the April 20 accident.

North Sea Fields

After operating in the North Sea since the mid 1960s, BP has 50 joint ventures with 40 companies and runs more than 30 fields in the U.K. Continental Shelf and the Norwegian sector, according to its website. BP also operates 10 pipeline systems, the Sullom Voe oil terminal on the Shetland Islands and two gas terminals at Teesside and Dimlington in England. About 60 percent of U.K. oil production flows through BP infrastructure, the company says.

BP aims to divest as much as $30 billion in assets by the end of next year to shore up its finances. It has set aside $40 billion for cleanup and compensation for the disaster in which almost 5 million barrels of crude spewed into the Gulf of Mexico from April to July.

The explosion aboard the Deepwater Horizon rig killed 11 workers and triggered the worst U.S. oil spill. The blast sank the $365 million vessel leased by BP from Transocean Ltd., shut a third of the Gulf to fishing, and halted deep-water oil exploration. In an agreement brokered with the U.S. Obama administration, BP set aside $20 billion to pay damage claims.

Colombia, Vietnam, Venezuela

BP, Europe’s largest oil producer by volume, in July agreed to sell assets in North America and Egypt to Apache Corp. for $7 billion, while in August the company disposed of fields in Colombia to Ecopetrol SA and Talisman Energy Inc. for $1.9 billion. BP has also sold operations in Vietnam and Venezuela to its Russian joint venture partner TNK-BP for $1.8 billion.

The company agreed in November to sell its fuels marketing businesses in Namibia, Botswana and Zambia to Puma Energy, as well as 50 percent interests in BP Malawi and BP Tanzania to a Trafigura Beheer BV unit for $296 million in cash.

In October, BP sold stakes in four Gulf of Mexico deepwater oil and gas fields for $650 million, following the sale of its role as operator of the Tubular Bells fields.

The Daily Telegraph reported the possible North Sea assets sale earlier today.

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