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Oil giant to sell stake in North Sea gas field

  • SOURCE: | qwesa2big
  • OIL giant BP is selling its stake in a North Sea gas field to energy firm SSE for $228m (£178m) as it continues to focus on long-term assets.

    The group said it is selling 50 per cent of Sean gas field in the southern North Sea to SSE E&P Ltd.

    The field, off the coast of Norfolk, produces around 18,000 barrels of oil equivalent per day. Its total proven and probable reserves are about 1.7bn therms over the life of the field, although SSE said this could rise through “infill drilling”.

    Trevor Garlick, regional president of BP North Sea, said: “The divestment of BP’s interest in the non-core, non-operated Sean field is consistent with our strategy of focusing on high value assets with long-term growth potential.”

    The field feeds into the Bacton gas terminal on the Norfolk coast and is run by Shell.

    David Franklin, SSE’s managing director of energy portfolio management, said: “We have made clear that SSE is proactively seeking new opportunities to increase our presence in upstream gas sector where assets can be acquired for a fair price, and that is exactly what this deal represents.”

    In the past two weeks BP has sold stakes in the Alba and Britannia fields – off the east coast of Scotland – to Mitsui. It also completed the sale of the Draugen field in Norway to Shell.

    BP has also sold stakes in other gas fields in the southern North Sea, including the Easington and Dimlington terminals in East Yorkshire and Dimlington to Saltend pipeline.

    In March it announced a deal to sell its southern gas assets (SGA) in the North Sea to Perenco UK for $400m (£250m) as part of a $38bn disposal programme between 2010 and the end of 2013 to pay for the Gulf of Mexico oil spill. The deal completed last month and included the Dimlington receiving terminal in East Yorkshire, an office in Hessle, as well as a number of manned and unmanned platforms off the coast of Yorkshire.

    The company said the sale of the SGA assets was part of its plan to develop a more focused North Sea business in the UK and Norway.

    “Perenco is committed to investing in and developing SGA beyond BP’s plans, ultimately providing a longer-term future for the assets and the people who work there,” said Mr Garlick.

    Perenco made an initial payment of $100m with the remaining $300m paid on completion. A further $10m may be paid in the future depending on prevailing gas prices. About 200 staff working at the assets transferred to Perenco on completion.

    The output from the SGA assets – now called Perenco SNS (North) – is the equivalent to about 25,000 barrels of oil per day.

    To date, the total value of North Sea assets sold by BP, including Sean gas field, is around $3.1bn.

    BP also has a stake in the Vivergo bioethanol plant at Saltend, a joint venture with DuPont and British Sugar. The plant recently started production. BP also has an acetyls plant in Saltend.

    The company is investing £10bn (£6.7bn) in the North Sea over the next five years.

    This includes spending £4.5bn on Clair Ridge project, the second phase of the giant Clair field, west of the Shetland Islands.

    It now employs more than 3,000 staff in its North Sea business and operates about 30 oil and gas fields. Its North Sea production is around 200,000 barrels per day.

    SSE, which owns Ferrybridge power station in West Yorkshire, is also behind the Aldbrough gas storage project in East Yorkshire, where gas is stored about 2km underground in salt caverns. At Aldbrough, seven of nine caverns are already storing gas, part of a £290m project.

    The Sean deal is expected to complete in 2013, and hinges on regulatory approval.


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