BP has agreed is to sell its UK gas assets in the southern North Sea to privately held French explorer Perenco for $400 million in cash, more than a year after first seeking a buyer.
BP put its stakes in gas fields and related pipeline assets in the southern North Sea up for sale in February 2011 as part of a multi-billion divestment program to cover the spiraling costs of the Gulf of Mexico oil spill disaster.
It was reportedly seeking "in excess of $1 billion," which it has narrowly achieved if last year's $610 million sale of the UK's only producing onshore oil field at Wytch Farm is included with Tuesday's sale.
BP said it was happy with the price achieved in the latest deal. "These are complex assets to sell," a spokesman said.
The deal includes stakes in gas fields with a combined net production of around 25,000 boe/day including three manned platforms, the oil major said.
Perenco has paid an initial $100 million with the remaining $300 million to be paid on completion, expected at the end of 2012. An extra $10 million could be paid depending on gas prices, BP said.
BP has been selling off non-core assets to strengthen its balance sheet as it pays claims in the wake of the 2010 Gulf of Mexico oil spill, which the company estimates will cost it close to $40 billion.
The major is targeting total assets sales of $38 billion by the end of 2013 and the latest deal brings its divestment total to $23 billion since early 2010, BP said.
London and Paris-based Perenco is one of the biggest operators in the southern North Sea, with stakes in 18 fields, 31 platforms and a gas terminal at Bacton, Norfolk.
The deal includes the Cleeton stream fields (Wollaston, Whittle, Ravenspurn North, Ravenspurn South), the West Sole stream fields (West Sole, Hyde, Hoton, Newsham), the Amethyst field, the Dimlington beach terminal and BP's office at Hessle.
Manned platforms include West Sole Alpha, Ravenspurn North and Cleeton.
Normally unmanned installations include Apollo/Minerva (M1, Mercury, Neptune, Wollaston and Whittle, West Sole B and C, Ravenspurn South, Amethyst (C1D, A1D, A2D & B1D), Hyde, Hoton, and Newsham.
Last year, BP said the gas assets are were of "high value, but difficult to compete for capital and resource within our North Sea portfolio." BP said it was still committed to the North Sea, with a multi-billion-pound investment program including four major field projects in the UK and a further two in Norway.
The UK projects include Clair Ridge, Quad 204 (Schiehallion), Devenick and Kinnoull. The Norway projects include Skarv and the Valhall redevelopment.
The deal with Perenco follows news in last week's UK government Budget that provided greater certainty over tax relief for decommissioning North Sea production assets.
Industry experts said the improved certainty on decommissioning liabilities would make it easier for smaller producers to take on assets from the majors.
BP is holding on to the tight gas assets it has in carboniferous reservoirs in the Amethyst and Ravenspurn licenses in the southern basin.
It wants government and partner approval for these to be separated from the rest of the assets, and to split them only with Perenco, which would have 10%.
Perenco, an independent oil and gas company with operations in 16 countries across the globe, has a history of deals with BP.
In February 2003, BP sold a package of UK southern North Sea assets to the company for $162 million. This included BP's share in 14 operated gas fields including Indefatigable, East Leman, Davy and Trent. Perenco also took over BP's Bacton beach gas terminal in Norfolk at that time.
In May 2011, BP sold its stake in the onshore southern England Wytch Farm oil field to Perenco, along with associated assets, for up to $610 million, depending on oil prices.
