BP said it agreed to sell a package of its interests in the Bruce assets in the North Sea to Serica Energy plc for up to £300 million.
BP currently operates the assets, which comprise the Bruce, Keith and Rhum fields, three bridge-linked platforms and associated subsea infrastructure.
Serica will pay BP an upfront payment of £12.8 million, a share of cash flows over the next four years, a consideration equivalent to 30% of BP’s post-tax decommissioning costs “and several contingent payments dependent on future asset performance and product prices.”
Overall, BP expects to receive payments of around £300 million, the majority of which will be received over the next four years.
Bernard Looney, BP chief executive, Upstream, said: “This is an example of BP’s upstream strategy in action – refreshing our portfolio and focusing our activity on assets which will add most value over the long-term.
“We remain committed to the North Sea and continue to invest.
“We expect our production there to double to around 200,000 barrels equivalent a day by 2020 through new projects like Quad 204 and Clair Ridge.
“While the Bruce assets are no longer core to BP, we are confident that Serica is the right owner and operator to maximise their continuing value for both companies and for the UK.”
Serica chairman Tony Craven Walker said: “This transaction will establish Serica as a leading British independent oil company with the scale, balance sheet and operating capability to prosper in the North Sea’s rapidly changing upstream oil and gas industry.”
The Bruce field was discovered in 1974 and came into production in 1993, with Keith tied back to Bruce in 2000.
Rhum, a high-pressure, high-temperature satellite field located 40 kilometres to the north of Bruce, was brought into production in 2005.
The Bruce assets are expected to see Serica become a fully operational entity with around 110 staff who operate the assets expected to transfer with the business.
Their contractual terms and conditions are protected under UK Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
BP will now begin consultation with staff.
Subject to the receipt of regulatory and other third-party approvals, BP aims to complete the sale and transfer of operatorship in the third quarter of 2018.
The deal comprises:
- Bruce – all, except 1%, of BP’s 37% interest (partners Total 43.25%, BHP Billiton 16%, Marubeni 3.75%)
- Keith – all of BP’s 34.84% interest (partners BHP Billiton 31.83%, Total 25%, Marubeni 8.33%)
- Rhum – all of BP’s 50% interest (partner Iranian Oil Company (UK) Limited 50%)