BP has put its North Sea oil and gas business up for sale as it looks to end six decades of production from the region.
The firm announced on Friday morning that it had launched a formal process to market its North Sea business for a potential sale. The move comes as BP’s new chief executive, Meg O’Neill, tries to simplify the company and cut its debt levels.
O’Neill said in a statement: “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.”
She said the UK would “continue to play an important role” in BP’s future. “We’re proud of the jobs we create, the contribution we make to the UK economy, and the work we do to keep energy flowing every day,” she said.
BP’s involvement in the North Sea dates back to 1964, when it was granted its first UK North Sea licence. The company discovered the West Sole gasfield in the winter of 1965, followed by its largest discovery in the area, the giant Forties field, in 1970.
The sale announcement comes a day after Andy Burnham said he would take a “pragmatic” approach to oil and gas drilling in the North Sea, saying the government could not ignore the potential energy resources it held.
Chris Beauchamp, the chief market analyst at the investing and trading platform IG, said BP’s North Sea sale was “a watershed moment”. “It says a lot when BP isn’t prepared to stick around to see if the new government can re-energise the UK’s energy policy,” he said. “Clearly BP thinks it will take too long at a time when the need to exploit new energy fields is pressing, and waiting around for Whitehall to move is not a prudent use of resources.”
The energy secretary, Miatta Fahnbulleh, said she was in close contact with BP over its plans.
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“The North Sea is a vital national asset and we will take a pragmatic approach, recognising that oil and gas will be part of our energy mix for years to come,” she said. “I’m in close contact with BP and have made clear that my priority is ensuring that the workers and local community are protected during this sale process.”
O’Neill took over as BP’s CEO on 1 April. Less than two months later, the company removed its chair, Albert Manifold, citing serious concerns about “important governance standards, oversight and conduct”.
