BP to raise $1.1bn from North Sea field sale

The Deepwater Horizon disaster caused one of the worst oil spills in history

BP has sold its stakes in several North Sea oil and gas fields to a state-owned Abu Dhabi energy group for $1.06bn (£663m).

Prime Minister David Cameron said the deal highlighted the "North Sea's position as a global energy hub".

The proceeds from BP's sale will help cover billions of dollars in costs from the 2010 Gulf of Mexico oil spill.

Abu Dhabi National Energy (Taqa) will acquire stakes in the BP-operated Harding, Maclure and Devenick fields.

'Global race'

Mr Cameron said: "This is a vote of confidence in the UK economy and once again, highlights the North Sea's position as a global energy hub.

"Today's announcement shows how recent changes to the North Sea tax regime are helping to create and sustain thousands of jobs in Scotland and across the rest of the UK, ensuring we thrive in the global race."

Carl Sheldon, chief executive of Taqa, said the billion-dollar deal, which is to be completed in 2013, would add 21,000 barrels of oil equivalent a day to its output, establishing the Abu Dhabi group "as a leading operator in the UK North Sea".

The acquisition is made up of BP's interests in both mature and newly developed projects including Harding (70%), Maclure (37.03%) and Devenick (88.7%) fields in the central North Sea, as well as BP's non-operated interests in the Brae fields complex and the Braemar field.

The disposed assets produce 40,000 barrels of oil equivalent a day, or nearly a quarter of BP's UK production, according to Peter Hutton, an energy analyst at RBC Capital Markets.

Tax breaks

The latest disposal follows a sale in March of BP's southern North Sea gas assets to France's Perenco for $400m.

BP is trying to divest aging fields to concentrate on new projects in central UK and Norwegian waters.

"This transaction is in line with BP's strategy to focus on a smaller number of higher-value assets with long-term growth potential and to continue the simplification of our portfolio with a further reduction of operated infrastructure and wells," said BP chief executive Bob Dudley.

The UK government in September unveiled a tax break for oil and gas companies in a bid to reverse a decline in exploration and production in an industry which employs more than 300,000 people.

"While new tax allowances have made investment in a range of challenging fields more attractive to investors, the current wave of activity comes with the expectation that the government will deliver certainty on tax relief on decommissioning," said Mike Tholen, Oil & Gas UK's economics and commercial director.

"We look forward to hearing more on that front" in the chancellor's Autumn Statement on 5 December, he added.

In July, China's Sinopec bought a 49% stake in the North Sea assets of Calgary-based Talisman Energy worth $1.5bn.

Criminal fine

BP's latest sale brings total disposals since 2010 to about $37bn, close to a $38bn target set aside by the company to pay for the total cost of the accident including fines and other liabilities.

BP earlier this month received a record $4.5bn fine relating to the fatal 2010 Deepwater Horizon disaster when an oil rig exploded and killed 11 workers.

Two BP workers have been indicted on manslaughter charges and an ex-manager charged with misleading Congress.

As part of the agreement, BP will also plead guilty to 14 criminal charges.