BP puts North Sea oil and gas business up for sale

BP is putting its North Sea oil and gas operations up for sale, marking the end of a six-decade presence in the region. The oil major announced Friday it has begun a formal marketing process for its North Sea business.

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The North Sea remains integral to the UK’s energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.

CEO Meg O’Neill stated the move is part of a strategy to simplify the company and reduce debt. "The North Sea remains integral to the UK’s energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company," O’Neill said in a statement. She added that the UK "would continue to play an important role" in BP’s future.

BP's involvement in the North Sea began in 1964. The company discovered the West Sole gas field in 1965 and its largest discovery in the area, the Forties field, in 1970. The sale announcement follows comments from Andy Burnham, who advocated a "pragmatic" approach to North Sea drilling.

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The North Sea remains integral to the UK’s energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.

Chris Beauchamp, chief market analyst at IG, called the sale "a watershed moment." He suggested BP's decision indicates a lack of confidence in the new government's ability to "re-energise the UK’s energy policy." Beauchamp noted that BP likely believes waiting for government action is not a prudent use of resources given the pressing need to exploit new energy fields.

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It says a lot when BP isn’t prepared to stick around to see if the new government can re-energise the UK’s energy policy. Clearly BP thinks it will take too long at a time when the need to exploit new energy fields is pressing, and waiting around for Whitehall to move is not a prudent use of resources.

Energy Secretary Miatta Fahnbulleh confirmed she is in close contact with BP. "The North Sea is a vital national asset and we will take a pragmatic approach, recognising that oil and gas will be part of our energy mix for years to come," she said. Her priority is ensuring workers and the local community are protected during the sale process.

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The North Sea is a vital national asset and we will take a pragmatic approach, recognising that oil and gas will be part of our energy mix for years to come.