By Marcus Leach
BP has announced that it has agreed to sell its interests in the Wytch Farm, Wareham, Beacon and Kimmeridge fields to Perenco UK Ltd ('Perenco') for up to $610m in cash.
The price includes $55m contingent on Perenco's future development of the Beacon field and on oil prices in 2011-13.
The sale of these interests is part of BP's plan, announced in July 2010, to divest up to $30 billion of assets by the end of 2011. Before Tuesday's agreement, BP had already announced sales agreements totalling around $25 billion.
"Today's agreement brings us even closer to the target of $30 billion of divestments by year end that we set out last summer. It demonstrates that we do have assets of quality that other operators see as more strategically valuable to them than to BP, thus unlocking value for our shareholders," BP group chief executive Bob Dudley said.
An immediate payment of $500m has been made, a further $55m will be paid on completion which is expected at the end of 2011 with the remaining $55m contingent on submission of the Beacon field development plan and oil prices. Completion of the sale is subject to partner pre-emption rights and a number of third party and regulatory approvals.
The divestment of Wytch Farm is an outcome of BP's strategic aim in the UK to invest in a more focused North Sea business portfolio in the northern North Sea, central North Sea, West of Shetland and Norway.
"The North Sea Region is a very important area for BP and we will sustain a significant business here for the long term. We are currently investing around $4bn per annum of capital and operating expenditure, which includes four major new field development projects in the UK and two in Norway," Trevor Garlick, regional president for BP North Sea, said.
It is expected that impacted BP employees based at Wytch Farm will transfer with the asset to Perenco.