BP wants to sell its British oil and gas fields in the North Sea which could fetch more than $2 billion, according to estimates, as new Chief Executive Officer Meg O'Neill accelerates a sweeping portfolio overhaul aimed at improving profitability.
A day earlier British Prime Minister Andy Burnham said he planned to take a "pragmatic" approach to developing and using oil and gas resources in the North Sea, setting out his position after US President Donald Trump said the basin would be opened up.
"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," Reuters quoted O'Neill as saying in a statement.
ExxonMobil, Chevron, ConocoPhillips, Shell, TotalEnergies and Eni have all sold, merged, spun off or otherwise reduced their operations in the ageing basin in recent years as production there falls and other locations offer more profitable projects.
Rystad Energy estimates BP's UK upstream portfolio is worth about $2.6 billion on a risked basis, with the most likely bidders including current North Sea producers.
That could include NEO NEXT+, a joint venture that includes Total; Adura, a joint venture involving Shell and Equinor ; or Ithaca Energy.
Two industry sources said the portfolio might fetch around $2 billion, adding that decommissioning liabilities are likely to add complexity to discussions.
BP, formerly known as British Petroleum, has worked in the North Sea for more than six decades and operates five major production hubs in the region, including the Clair oilfield, the largest on the UK continental shelf.
BP, which is expanding in regions such as the United States and Brazil, generated about 5% of its oil and gas output from the British North Sea last year, around 117,000 barrels out of a total of 2.3 million barrels of oil equivalent per day.
BP has since agreed to sell its stake in the Culzean field which reduces its UK output by around 25,000 boed.
BP will retain its UK aviation fuel distribution business, retail sites and its huge trading desk alongside its London headquarters, it said.
BP shares were up 1.36% at 1451 GMT versus a broader index of European energy companies up 1.1%.
As opposed to the other major North Sea oil and gas producer Norway, Britain's tax regime on the industry in recent years has been marked by successive changes, decried by oil and gas companies for deterring investment.
"This decision is another stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry," said Russell Borthwick, chief of the Aberdeen & Grampian Chamber of Commerce, which comprises many UK oil and gas producers.
Burnham's Labour Party has already softened its election pledge to stop handing out new oil and gas licenses and Energy Minister Miatta Fahnbulleh said she was in close contact with BP over its sale plan.
Operating costs in the UK North Sea are expected to average $25.20 per barrel of oil equivalent in 2026, Rystad estimates showed, compared with a global average of $10.60 per barrel of oil equivalent.
BP employs 1,100 workers in its North Sea business out of a total of around 14,000 employees in Britain, it said.
Overall output in the ageing oil and gas basin has plummeted to around 1 million boed last year from 4.5 million boed at the turn of the millennium.
BP has stepped up its efforts to reduce debt and refocus on its oil and gas businesses after scaling back its investment in renewable energy.
Currently it is a "seller's market" for oil assets, Shell CEO Wael Sawan said on Thursday in a call with analysts to discuss the company's earnings.
Stronger commodity prices typically favor sellers of assets, and the US-Iran war has pushed oil and gas prices to multi-year highs.
Since O'Neill took over in April, BP has reorganized into two business segments — upstream and downstream — from three, a change that took effect this month.
An internal email seen by Reuters on Thursday also disclosed BP's plans to reduce its workforce by 700.
