BP plans to sell several UK assets

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The Independent Online

Oil giant BP today revealed plans to sell several assets in the UK, including the biggest onshore oil field in Western Europe.

The company said it intends to sell its Wytch Farm terminal, which is set in a designated Area of Outstanding Natural Beauty in the Dorset countryside, and all operated gas fields in the southern North Sea for an undisclosed sum.

But the British group said this did not signal a move away from the UK and pledged high levels of investment for its remaining assets in the North Sea. BP said it expects staff to transfer employment to a new buyer when the sales are completed.

The Wytch Farm oil field, which was bought by BP in 1984, produces 25,000 barrels of oil per day and employs more than 200 staff, recently re-opened after an oil leak forced it to shut down for around two months.

If the sale completes within 2011, the cash raised will go towards BP's pledge to fund compensation for the Gulf of Mexico oil spill through 30 billion US dollars (£18.5 billion) worth of asset disposals.

However, a spokesman for BP said the UK sell-off was not driven by compensation goals and was focused on a restructuring of its UK portfolio.

Its 2010 results earlier this month revealed a 4.9 billion US dollar (£3 billion) loss after the cost of the Deepwater Horizon tragedy was taken into account.

The group has made significant moves into emerging markets in recent months, including a multi-billion pound tie-up with Indian firm Reliance Industries announced yesterday, and a deal with Russian state-owned oil giant Rosneft.

The Wytch Farm oilfield is 17 miles from Poole, in the Purbeck district of Dorset. BP said it has recoverable reserves of around 480 million barrels.

The North Sea assets up for sale include Cleeton, West Sole, and Amethyst fields, as well as the Dimlington gas terminal, in North Humberside.

Trevor Garlick, regional president of BP North Sea, said: "The North Sea is a significant business for BP and we are currently investing here at the highest level for more than 10 years, with four major new field development projects under way in the UK and two in Norway.

"The assets we intend to divest are of high value but find it difficult to compete for capital and resource within our North Sea portfolio. We believe they will attract earlier investment and be of greater value to a new buyer."

BP invested some £1.5 billion of capital in the North Sea during 2010 and plans to invest some £12 billion in total over the next five years. To deliver its North Sea plans, BP is looking to recruit around 150 engineers annually.

Yesterday, the oil giant said it would acquire a 30% stake in 23 oil and gas blocks operated by Mumbai-based Reliance Industries, the energy business run by Asia's richest man Mukesh Ambani, for 7.2 billion US dollar (£4.5 billion).

Its £10 billion deal with Rosneft, announced last month, will open up unexplored reserves in the Arctic.