BP’s is said to be planning to offload £1bn of its North Sea assets.
The company has said it will not comment on the speculation, but industry experts are mulling over the potential implications.
Hannon and Westwood has advised the oil and gas industry for 15 years on business intelligence. Its director Jim Hannon said yesterday: “The assets that BP is likely to be considering for divestment will probably cover a wide range of asset types, areas and sizes and may appeal to all sizes of company.
He added: “Certainly the peripheral production will be of interest to smaller companies wishing to improve their credit rating with banks, and also provide cashflow to finance ‘riskier’ activity.
“Most of the production is non-operated and may provide opportunity for existing players to consolidate their area positions, or else provide the impetus for other co-venturers to also take stock of their own non-core holdings.”
Mr Hannon said that the North Sea contains over 20bn barrels of oil and gas equivalent, but “requires enormous amounts of investment”.
“Even the next phase of just 15% of this figure from the higher priority discoveries will need over $30bn in the next five years,” he added. “The change of ownership through sales of existing production and potential development hubs to new entrant or emerging companies is one important ingredient in securing these development funds.”
He said that although BP is reviewing its portfolio, it has re-affirmed its position as a long-term North Sea player, and added that “BP views the West of Shetland areaas a prime target area for future growth”.