BP and ConocoPhillips today announced agreements for BP to sell its non-operating interest in the Kuparuk and satellite oilfields in Alaska to ConocoPhillips.
In the deal, BP will also purchase a field from ConocoPhillips west of the Shetland Islands in the North Sea, giving BP a 45.1 percent interest in an area known as the Clair Field.
BP will sell to ConocoPhillips its entire 39.2 percent interest in the Greater Kuparuk Area on the North Slope of Alaska, and BP’s holding in the Kuparuk Transportation Company.
Details of the transactions are not being disclosed but the transactions together are said to be cash neutral for BP and ConocoPhillips.
“These transactions are significant for ConocoPhillips because they continue our strategy of coring up our legacy asset base in Alaska, while retaining an interest in the Clair Field in the U.K.,” said Ryan Lance, chairman and chief executive officer. “We have a long history of creating value in Alaska and an ongoing commitment to invest in our legacy assets, as well as in the development of our recent exploration success. Likewise, we are committed to maximizing the value of our assets in the U.K. North Sea, including continued investment in our operated assets in the Central North Sea.”
BP was upbeat about the transaction and how it aligned with corporate goals:
“This is a further step in focusing our portfolio around core assets and developments which have the potential for significant growth. Clair is a key advantaged oilfield for our North Sea business, a giant resource whose second phase is about to begin production and which holds great potential for future developments,” said BP Upstream chief executive Bernard Looney.
“In Alaska, this transaction will increase our focus on managing our deep resource base at the massive Prudhoe Bay oilfield and help enable a more competitive and sustainable business for BP.”
The Greater Kuparuk Area is operated by ConocoPhillips Alaska. The Greater Kuparuk Area includes the Kuparuk oilfield and the satellite fields of Tarn, Tabasco, Meltwater and West Sak. In 2017, the Greater Kuparuk Area had average daily gross oil production of approximately 108,000 barrels a day. The agreement will also include BP’s interest in the Kuparuk pipeline, which transports oil from the Greater Kuparuk Area to the inlet of the Trans-Alaska Pipeline (TAPS) at Pump Station 1.
The transaction will not affect BP’s position as operator and co-owner in the Prudhoe Bay oilfield in Alaska. The transactions are subject to State of Alaska, US federal and UK regulatory approvals and other approvals, which are anticipated later this year.