BP Makes $625 Million Exit From North Sea Assets
The deal is part of BP’s plan to divest $10 billion in the North Sea so that it can focus on developing core growth areas and construct more cost-effective subsea tiebacks in the region.
BP has agreed to sell several properties in the UK North Sea to Premier Oil for $625 million.
The assets set to change hands include the BP-operated Andrew area and its non-operating interest in the Shearwater field. The deal, expected to close later this year, is part of BP’s plan to divest $10 billion by the end of 2020.
“BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204, and ETAP hubs,” said Ariel Flores, the North Sea regional president at BP. “We’re adding advantaged production to our hubs through the Alligin, Vorlich, and Seagull tieback projects.”
BP operates five fields in the Andrew area: Andrew (62.75%); Arundel (100%); Farragon (50%); Kinnoull (77%). Located about 140 miles northeast of Aberdeen, the Andrew asset also includes associated subsea infrastructure and the Andrew platform that all five fields produce through.
First oil was achieved in the Andrew area in 1996 and as of 2019 average production was between 25,000-30,000 BOE/D. BP said 69 employees will transfer to Premier Oil to operate the Andrew assets.
BP also holds a 27.5% interest in the Shell-operated Shearwater field, which is 140 miles east of Aberdeen and produced around 14,000 BOE/D in 2019.
Located west of Shetland, the Clair field is being developed in phases. BP, which owns a 45% stake in the field, said first oil from the second phase was achieved in 2018 and is targeting a total of 640 million bbl with a peak production of 120,000 B/D.
Also west of Shetland, the Quad 204 projects involves the redevelopment of two existing assets—the Schiehallion and Loyal fields. Quad 204 produces from a floating, production, storage, and offloading unit and involved the replacement of subsea facilities along with new wells. First oil from the redeveloped field was achieved in 2017.
Additionally, BP is completing a major installation program of subsea tiebacks, which eliminate the need to construct new production platforms to develop otherwise, marginal reservoirs:
- The Alligin tieback in the Greater Schiehallion area west of Shetland is expected to produce 12,000 BOE/D sometime this year.
- Vorlich will be tied back to Ithaca Energy’s floating production unit in the central North Sea and is targeting 20,000 BOE/D.
- Seagull is to be connected to BP’s ETAP (Eastern Trough Area Project) in the central North Sea and is set to produce 50,000 BOE/D when it comes on line next year.
- A final investment decision is expected soon on the Murloch development which may also be tied back to the ETAP hub.