BP launches $2.6 billion North Sea sale, ending 60-year era

BP's exit from the North Sea marks the biggest supermajor retreat from the basin since it sold the Forties field in 2003.

BP launched a formal sale of its UK North Sea business, valued at about $2.6 billion by Rystad, ending six decades of offshore production as new CEO Meg O'Neill accelerates a $20 billion divestment program. The move, announced Friday, hands the basin's five major production hubs to a buyer willing to back their final years.

"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. "It has world-class people, resilient assets and a proud heritage."

BP shares rose 0.4 percent at 0810 GMT, lagging a 0.7 percent gain in the European energy index. The basin's output has collapsed to about 1 million barrels of oil equivalent a day last year from 4.5 million at the turn of the millennium, and BP generated roughly 5 percent of its production from the British North Sea in 2025, about 117,000 barrels of its 2.3 million daily total.

The sale is the centerpiece of O'Neill's plan to shed $20 billion of assets by the end of 2027, with $9 billion to $10 billion targeted this year. Decommissioning costs of up to $3 billion complicate pricing, and failed private talks with Ithaca Energy over a roughly 2 billion pound deal pushed BP to open a public auction. Rystad analyst Matt Cooper said the public process may be designed "to introduce other competing parties and avoid being cornered by a single buyer."

A Basin Under 78% Tax

The decision is the sharpest rebuke yet of Britain's tax regime, which levies an effective rate of up to 78 percent on North Sea profits through the Energy Profits Levy. Russell Borthwick, chief of the Aberdeen & Grampian Chamber of Commerce, called it "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." Prime Minister Andy Burnham has taken a "pragmatic" stance on drilling, softening Labour's pledge to halt new licences, while Energy Minister Miatta Fahnbulleh said she is in close contact with BP over the sale.

The retreat echoes BP's 2003 decision to sell the Forties field to Apache, which began the supermajors' departure from the basin. Since then, ExxonMobil, Chevron, ConocoPhillips, Shell, TotalEnergies and Eni have all sold, merged or reduced North Sea operations as production falls and other regions offer better returns. Norway, by contrast, has kept a stable tax regime that continues to draw investment.

Who Could Buy

Potential buyers include Neo Next+, a joint venture of TotalEnergies, HitecVision and Repsol, and Ithaca Energy, majority-owned by Delek Group and Eni. BP operates five hubs employing about 1,100 workers, including the Clair oilfield, the largest on the UK continental shelf. The company will retain its UK aviation fuel distribution, retail sites, trading desk and London headquarters, and has agreed to sell its Culzean stake, cutting UK output by about 25,000 barrels a day.

BP, which has worked the basin for more than six decades, will cut 700 jobs as part of the restructuring, according to an internal email. If a buyer emerges, the deal would hand the basin's remaining infrastructure to a smaller operator willing to back its final years; if not, BP may retain the decommissioning liabilities and sell only its producing assets. O'Neill's decision marks a sharp turn from her early comments that the North Sea still held "untapped potential," and the outcome will shape whether other supermajors follow her out of the basin.

This article is for informational purposes only and does not constitute investment advice.