BP and Premier Oil in $625MM North Sea Deal
BP revealed Tuesday that it has agreed terms to sell its interests in the Andrew area, and its non-operating interest in the Shearwater field, to Premier Oil for $625 million.
The sales are the latest step in BP's planned program of $10 billion divestments by the end of 2020, the company highlighted. Subject to the receipt of regulatory and other third-party approvals, BP aims to complete the sale and transfer of operatorship of the assets at the end of the third quarter of 2020.
BP operates the Andrew assets, which comprise the Andrew platform and the Andrew (62.75 percent), Arundel (100 percent), Cyrus (100 percent), Farragon (50 percent) and Kinnoull (77.06 percent) fields, as well as associated subsea infrastructure. BP holds a 27.5 percent stake in the Shell-operated Shearwater field.
The five fields in the Andrew area all produce through the Andrew platform. The hub started production in 1996 and in 2019 average daily production was around 25,000 to 30,000 barrels of oil equivalent per day, according to BP. Shearwater's 2019 production has been in the region of 14,000 barrels of oil equivalent per day gross, BP noted.
The Andrew assets are expected to transition to Premier Oil as a fully operational entity with 69 staff who operate and support the assets, according to BP. There is no transfer of staff associated with the Shearwater sale.
“BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204 and ETAP hubs. We're adding advantaged production to our hubs through the Alligin, Vorlich and Seagull tieback projects,” Ariel Flores, BP North Sea regional president, said in a company statement.
“As a result of this focus, we have also now decided to divest our Andrew and Shearwater interests, believing them to be a better strategic fit for another owner. We are confident that Premier Oil, already a significant operator in the North Sea, is the right owner of these assets as they seek to maximize their value and extend their life,” Flores added.
Commenting on the deal, Premier Oil Chief Executive Tony Durrant said, “we look forward to realizing the significant long-term potential of the Andrew and Shearwater assets through production optimization, incremental developments and field life extension projects”.
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