BP sells North Sea Forties field, Gulf of Mexico shallow assets for $1.3 billion

Petroleum News Alaska

BP and said Jan. 13 that it has agreed in principle to sell its 96.14 percent stake in the North Sea Forties oilfield, together with a package of shallow-water assets in the Gulf of Mexico, to U.S. independent oil and gas company Apache Corp., for $1.3 billion.

BP's share of production from the Forties field is some 48,000 barrels of oil equivalent a day.

The Gulf of Mexico assets comprise interests in 61 small fields in the shallow water, mainly gas producers, BP said, with its net share of output some 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."

"The North Sea fits our balanced-portfolio business model and provides the potential for future internal growth similar to what we have experienced in places like Egypt," said CEO and President Steven Farris.

Apache said it has a physical sale agreement with BP to take all of Apache's North Sea production for two years at a combination of fixed and floating prices. Apache will become field operator with a 96 percent working interest in the Forties field, discovered by BP in 1970. It began producing oil in 1975, and peaked at some 500,000 bpd in 1979. To date, some 2.5 million barrels of oil have been produced from the field, the largest ever found in the U.K. sector of the North Sea.

Apache said the Gulf of Mexico properties are offshore Texas and Louisiana in areas where it has substantial operations.