BP to put North Sea business up for sale after 60 years

BP has announced it is putting its North Sea business up for a potential sale after 60 years of production.

The energy giant said the decision forms part of ongoing efforts to slim down the group by selling off parts of the business.

BP’s North Sea portfolio includes two production hubs and employs around 1,100 people.

The announcement comes after Prime Minister Andy Burnham left the door open for future North Sea drilling as he confirmed he told Donald Trump, “we can’t ignore” the resources there.

He said he told the US president that he would “take a pragmatic approach when it comes to the North Sea”, adding: “There is a resource there. When people are struggling, we can’t ignore that.”

Chief executive officer, Meg O’Neill, said: “The UK has been our home for more than 100 years and will continue to play an important role in our future. We’re proud of the jobs we create, the contribution we make to the UK economy, and the work we do to keep energy flowing every day.

“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.

“It has world-class people, resilient assets and a proud heritage, and it is precisely these qualities that can attract an owner ready to back its next chapter. We are seeking an outcome that recognizes that value.”

The announcement also follows reports that the company is to cut 700 “non-frontline” jobs.

According to an internal email seen by the Financial Times, the changes would result in a flatter corporate structure.

The email also said global market signals pointed to “potential oversupply and lower oil and gas prices”.

Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: “Today’s announcement from BP should be a defining moment for the new Prime Minister. How many more jobs need to be lost before the UK Government acts?

“This decision is another stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry.

“The Prime Minister has spoken about taking a pragmatic approach to the North Sea. He now has an opportunity to turn those words into action.

“That means delivering on the commitment to replace the Energy Profits Levy with the Oil & Gas Revenue Levy – which includes a permanent windfall tax mechanism that would apply when prices are high – well before 2030. It is imperative that we create a stable, long-term fiscal regime and ensure our regulatory system can approve investment at the pace required.

“The North Sea remains one of the UK’s greatest strategic assets. It underpins our energy security, supports hundreds of thousands of skilled jobs and generates billions for the public finances. But unless investors have confidence that Britain is open for business, more capital, more jobs and more expertise will continue to leave.

“BP’s decision should not be viewed in isolation. It is the latest signal that the UK is at a crossroads. The new Prime Minister has a genuine opportunity to reset the relationship with our offshore energy sector and restore confidence before more investment is lost.

“Industry is not asking for special treatment. It is asking for certainty, stability and a policy framework that recognises the continued importance of domestic oil and gas while we build the energy system of the future.”