BP Sells North Sea Assets To TAQA
Sale of North Sea assets, including Maclure, Harding andDevenick fields and non-operated assets in Brae complex of fields.
BP Plc. plans to sell its interests in a number of North Sea oil and gas fields to TAQA, the Abu Dhabi National Energy Company PJSC, for as much as $1.308 billion in cash and future payments.
The purchase price includes $1.058 billion in cash plus future payments which, depending on oil price and production, BP currently expects will exceed $250 million over a three-year period.
The assets included in the sale are BP’s interests in the BP-operated Maclure, Harding and Devenick fields and non-operated interests in the Brae complex of fields and the Braemar field. The Maclure oil field started production in 2002 and was developed via a single subsea gas-lifted well tied back to Maersk’s Gryphon Floating Production Storage and Offloading vessel. BP is the operator and owns 37.04%.
Harding has been a quality asset for BP, but it is isolated from the rest of BP’s portfolio and will require significant investment and resource to develop its gas reserves. BP’s major capital investment program is focused on other assets from which it can extract greater value in the central and northern North Sea, west of Shetland and Norway. BP owns 70% of Harding and is the operator.
Devenick, which was brought on-stream in September, is a subsea tie-back to the East Brae platform. Given the inclusion of BP’s interest in Braes in this deal it makes strategic sense to include Devenick in the sale package. BP owns 88.7% of Devenick and is the operator.
BP has an equity interest of 27.7% in the Marathon-operated Brae fields, a collection of oil and gas fields -- South, Central, North and West Brae -- which started production in the 1970s, and 33.21% in the Marathon-operated East Brae field and production facility.
Braemar is a subsea tie-back to the Marathon-operated East Brae platform in which BP owns a 52% interest.
Bob Dudley, BP group chief executive, said: “This transaction is in line with BP’s strategy to focus on a smaller number of higher-value assets with long-term growth potential and to continue the simplification of our portfolio with a further reduction of operated infrastructure and wells.”
Trevor Garlick, regional president, North Sea, said: “It has made strategic sense for BP and for the buyer to combine our non-operated interests in the Braes and Braemar fields with Harding, Maclure and Devenick. BP continues with a focused investment programme in the UK and Norway, which includes planned capital spending of $10 billion over five years.”
With this planned sale, BP has now entered into agreements to sell assets with a value of around $37 billion since the beginning of 2010. BP expects to divest assets with a total value of $38 billion between 2010 and 2013 as it focuses its business around the world on its strengths and opportunities for growth.
Jefferies acted as financial adviser to BP in relation to this transaction, which both companies expect to complete in second quarter 2013.
TAQA issued a brief statement confirming the planned purchase. “This investment secures thousands of jobs that TAQA supports in the North Sea, and reinforces the status of TAQA, a company based in Abu Dhabi, as the leading UAE investor in the UK. It follows a constructive dialogue between the oil and gas industry and the UK Treasury,” according to the statement.
BP’s annual North Sea production averages around 200,000 barrels of oil equivalent per day and the company has over three billion barrels of estimated proven and contingent resource available in the region.
The company employs over 3,000 staff in its North Sea business and operates around 30 oil and gas fields.
BP-operated producing assets include Clair, Schiehallion, Foinaven and Magnus in the Shetland area; Andrew, ETAP and Bruce in the UK’s central North Sea; and Valhall, Ula, and Hod in Norway. The company also operates the Sullom Voe Terminal in Shetland, the CATS gas terminal in Teesside, and the Forties Pipeline System and Kinneil terminal.
BP plans to invest $10 billion (c £6.7billion) net over the next five years in the North Sea – including major projects in the UK and in Norway.
Three major projects are currently underway in the UK – Clair Ridge, Quad 204 (Schiehallion), and Kinnoull – and two in Norway – Skarv and the Valhall Redevelopment.
BP’s strategy to focus in the North Sea has already included the sale of the Wytch Farm oil field in Dorset, the Southern Gas Assets and the sale of its non-operated stakes in the Draugen, Alba and Britannia fields. The total value of those assets sold, including this deal, is around $2.8 billion.