BG and BP Swap North Sea Assets
BG Group and BP have signed an agreement involving the exchange of interests in several UKCS assets. The package includes producing fields, pre-sanction assets and exploration acreage. The exchange is subject to the usual DTI and co-venturer approvals, and completion is expected in the summer, with an economic effective date of January 1, 2002.
The agreement helps consolidate BG's UKCS asset base, and is believed by the company to be one of the largest asset exchanges in the recent history of the North Sea.
Under the arrangement, BG will acquire BP's entire interest in Elgin/Franklin (1.76% plus associated infrastructure), Neptune (18%), Atlantic (75%), plus a 14.7% interest in block 29/4d (Glenelg discovery), as well as exploration blocks 14/26b and 14/27a (both 41.67%), adjacent to Atlantic, and 29/4f (14.7%), near Glenelg. In exchange, BG will transfer to BP its entire interest in the Brae Area (7% average equity) and in exploration block 49/30a-N (50%), and will pay £21.5 million in cash.
Speaking today, Jon Wormley, BG Executive Vice President UK and Ireland, said: "In concluding this complex and challenging transaction, BG and BP have achieved a formula that will greatly benefit both companies from a strategic as well as an operational viewpoint. It proves that determination, creative thinking and willingness to co-operate can lead to mutually advantageous swaps in the UKCS - even in mature basins." "For BG, the swap brings considerable benefits and opportunities. We are consolidating our position in the BG-operated Neptune field, while increasing our interest in the Elgin and Franklin fields. We also gain further equity in the Glenelg field development, which is a satellite to Elgin/Franklin. The acquisition of Atlantic - which lies between the BG-operated Blake and our significant new "Buzzard" discovery - also means that, given the right investment climate, we have the opportunity of jointly operating an exciting new development in the Moray Firth."