BP Sells Forties Field & Gulf of Mexico Assets to Apache

BP has agreed in principle to sell its 96.14 per cent stake in the North Sea Forties oilfield, together with a package of shallow-water assets in the Gulf of Mexico, to Apache for $1.3 billion.

BP's share of production from Forties is some 48,000 barrels of oil equivalent a day. Its overall current production from the UK North Sea is approximately 750,000 barrels a day.

The Gulf of Mexico assets comprise interests in 61 small fields in the shallow water, mainly gas producers. BP's net share of output is around 71,000 barrels of oil equivalent a day.

BP's share of the combined proved reserves for these assets is approximately 243 million barrels of oil equivalent.

The disposals are an outcome of BP's ongoing comprehensive review of its worldwide asset portfolio, announced by chief executive Lord Browne last October. Further transactions are expected during 2003.

BP said that sale would improve returns on its upstream portfolio by reducing operating costs and freeing up capital for investment in other projects offering better profit margins.

"The objective of our asset review is to emerge with a more streamlined, consolidated portfolio that offers improved financial returns and higher value growth in the near and long term," the company said. "This means disposing of assets that may be worth more to others than to us.

"We believe this is an excellent deal for BP and Apache. Among other things, it brings to the UKCS a powerful US independent, for which Forties will be a highly material asset and therefore more likely to attract necessary future investment."

Subject to UK and US regulatory consents and other approvals, the sale is expected to be completed in the first half of this year. The Forties pipeline is not included in the sale.