LONDON (AFX) – BP PLC plans to dispose of several billion dollars of assets, notably some of its mature oil and natural-gas fields in the North Sea, The Wall Street Journal Europe reported, citing industry officials familiar with developments.
Rather than invest the large amounts needed to prevent petroleum output declining at fields with depleting reserve and production profiles, the company intends to sell the assets, the industry officials said.
The planned sales are part of BP’s wide-ranging internal review to cut costs and focus spending on its most profitable assets, the WSJ said.
“The North Sea will feature highly in the disposals,” one industry official said.
At over 800,000 barrels a day, oil and natural-gas output from the North Sea accounts for nearly a quarter of BP’s total petroleum production of some 3.5 million barrels a day. But many North Sea fields, like their counterparts in Alaska where BP is also a major player, were developed in the 1970s and are well past t heir peak. To prevent output declines at such fields, BP would need to make massive investments, money that the company may well want to spend on newer projects with large production growth potential in regions such as the Gulf of Mexico, western Africa and Asia.
A BP spokesman said there is no final decision on what the company may sell.
“There is also no aggregate financial target for the disposals,” the spokesman said in response to industry reports that the sales may exceed US$3 billion , with the North Sea assets alone accounting for some US$2 billion in disposals.