BP has sold part of its equity in the Magnus oil field and the Sullom Voe terminal in Shetland to rival explorer Enquest for $85 million in the hope that it can help squeeze MER oil from the mature field.
Bob Dudley, BP group chief executive, explained: “EnQuest’s experience of investing in and extending the life of mature assets in the North Sea make them a natural operator of Magnus and Sullom Voe in this later phase of their life.
“We believe this will enable them to prolong the life of the assets, benefiting the region and creating additional value for both EnQuest and BP shareholders.”
Included in the agreement are: 25% of BP’s 100% stake in Magnus; 25% of BP’s interests in a number of associated pipelines, and a 3% interest in the Sullom Voe Terminal from BP Exploration Operating Company Limited’s (BPEOC) current total 12% stake.
The price of $85 million is expected to be met by EnQuest from the sharing of future cash flows from the assets – and will not include any upfront payment to BP.
Mark Thomas, BP North Sea Regional President, added: “In recent years, we have been focusing our North Sea portfolio around core assets west of Shetland and in the central North Sea – bringing new fields into production, redeveloping and renewing existing producing facilities, acquiring new acreage and interests through licence rounds and farm-ins and selling some of our mature assets to those who see greater strategic fit with their businesses.
“Sullom Voe and Magnus have been great businesses for BP, but to maximise the economic life of these important assets, we believe this deal will offer them a better long-term future.
“With their integrated skills, operational scale, cost structures and high levels of operating efficiency we have seen what EnQuest can do on the Thistle, Deveron and Don fields that were previously operated by BP.
“We believe this is a good example of having the ‘right assets’ in the ‘right hands’, offering new opportunities for the assets and benefitting the UKCS, in the spirit of Maximising Economic Recovery (‘MER UK’).”