BP, BG Group Swap UK North Sea Assets

BP and BG Group have agreed to exchange a package of North Sea assets which is intended to strengthen BP's position as a major operator in the Southern North Sea and facilitate development activity and investment in the UKCS.

BP has agreed to acquire BG Group's interests in a number of Southern North Sea fields - the BP-operated Amethyst, Whittle and Wollaston fields and all of BG Group's interests in the Easington Catchment Area (ECA) fields including Mercury, Neptune, Minerva, Apollo and Artemis.

BG Group has agreed to acquire BP's interests in three Central North Sea fields - the BP-operated Everest and Lomond fields, and the BG-operated Armada field. BG Group has also agreed to acquire 32% of the Chevron-operated Erskine field from BP.

The respective equity interests have been agreed to be exchanged without any cash payment.

Upon completion of the deal, around 90 BP offshore staff currently working on the Everest and Lomond installations will transfer to BG under TUPE regulations (Transfer of Undertakings - Protection of Employment). There are no offshore staff involved in the assets transferring from BG Group to BP as BP already operates the assets involved. A small number of onshore positions in BP are impacted by the asset transfer, but BP has agreed to redeploy locally within BP all of the individuals involved.

Dave Blackwood, Head of BP's North Sea Business, said, "This is an excellent outcome for both companies involved and for sustaining future investment in the North Sea. The deal is production neutral, strengthens BP's position in a core area, allows us to operate more efficiently, and therefore to maximize the value of our operations and infrastructure in the Southern North Sea."

BG Group's Executive Vice President and Managing Director, Europe and Central Asia, Mark Carne added, "This agreement consolidates and strengthens BG Group's UK Continental Shelf interests. By focusing on material interests in key hubs, we can increase efficiency and economically develop satellite fields. We have also shown with recent high-pressure, high-temperature finds that there is still significant potential in the Central North Sea."

BG Group will assume control of BP's equity in the Everest, Lomond and Armada fields, increasing its equity stake in these fields from around 60% to around 80%. BG Group will become operator of the Everest and Lomond fields and will continue to operate the Armada field.

The deal is subject to Government, regulatory and co-venturer approvals and completion is expected in the second quarter of 2009.