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BP clings to Arctic, oil sands interests
Gary Park For Petroleum News
BP is unloading another package of Canadian assets to help pay bills arising from its Macondo well blowout in the Gulf of Mexico, but is not ready to give up its interests in the oil sands and Arctic.
It has struck a cash deal for US$1.67 billion to sell its Canadian natural gas liquids business to Plains Midstream Canada, a wholly owned unit of Plains All American Pipeline, which has been steadily establishing a footprint in Canada over the past decade.
The business includes 450 employees, who will be transferred to Plains’ Canadian subsidiary, which concentrates on extracting, processing and transporting gas liquids across Canada and in the Great Lakes region of the U.S., including a fully integrated network that transports up to 150,000 barrels per day of supply.
The business owns or has rights to about 2,600 miles of pipeline systems, 20 million barrels of liquefied petroleum gas storage capacity, seven fractionation plants with 232,000 bpd of capacity, multiple straddle plants and two field gas processing plants with aggregate capacity of 8.3 billion cubic feet per day, and 10 million barrels of long-term and season gas liquids inventory.
In addition, the bundle includes supply contracts at other field gas processing plants, shipping arrangements on third-party NGL pipelines and long-term leases on 720 rail cars.
Expected to close by mid-year The transaction, which is expected to close before mid-2012, brings BP within $4 billion of its goal to divest $30 billion of assets this year and works on shedding $45 billion in assets to meet its Macondo compensation costs.
BP Group Chief Executive Bob Dudley said Canada “remains an important part of our portfolio of growth to meet North American energy needs” and is not part of the company’s strategy to unload lower-margin assets while focusing on larger, higher-earning projects.
The list of what BP plans to retain includes three oil sands joint-ventures — the 200,000 bpd Sunrise project with Husky Energy, the Pike lease with Devon Energy and the Terre de Grace lease with Value Creation.
BP also holds exploration licenses in the Beaufort Sea and Mackenzie Delta, where it has committed to spending C$1.2 billion on exploration.
It has 50 percent ownership of a Beaufort program in partnership with Imperial Oil and ExxonMobil that is scheduled to get under way once the National Energy Board updates Canada’s offshore drilling regulations.
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