BP has put its UK North Sea oil and gas business up for sale, raising fresh questions over investment, jobs and energy security, just as Government promised a more pragmatic approach to the basin.
The company has launched a formal sale process covering operations that employ around 1,100 people and produced approximately 117,000 barrels of oil equivalent a day last year.
That represented around 5% of BP’s total global oil and gas output of 2.3 million barrels a day. The business includes interests in five major production hubs across the central North Sea and west of Shetland, including Clair, the largest oilfield on the UK continental shelf.
BP Chief Executive Meg O’Neill said: “The North Sea remains integral to the UK’s energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.”
The decision could bring BP’s six decades as a North Sea producer to an end.
The company received its first UK offshore licence in 1964, discovered the West Sole gasfield the following year and found the giant Forties field in 1970.
The sale forms part of a wider overhaul under Ms O’Neill, who took charge in April and is seeking to simplify BP, reduce debt and concentrate spending on projects offering stronger returns.
BP has reorganised its operations into upstream and downstream divisions after previously retreating from parts of its renewable energy strategy.
The company is also cutting around 700 non-frontline jobs as it targets further cost reductions.
The Financial Times previously reported that BP held advanced talks to sell its North Sea assets to Ithaca Energy for close to £2 billion but the discussions failed to produce an agreement.
The formal process could now attract smaller operators and private equity-backed producers, which have increasingly acquired assets from oil majors reducing their exposure to the ageing basin.
ExxonMobil, Chevron, ConocoPhillips, Shell, TotalEnergies and Eni have all sold, merged or scaled back parts of their UK North Sea operations in recent years.
Production across the basin has fallen from around 4.5 million barrels of oil equivalent a day at the start of the century to approximately one million last year.
Energy Secretary Miatta Fahnbulleh said the North Sea remained a vital national asset and confirmed she was in close contact with BP. She said protecting workers and local communities would be the Government’s priority during the sale process.
BP said the UK would continue to play an important role in its future despite the proposed disposal of its North Sea production business.
