BP to sell Andrew area and Shearwater North Sea to Premier Oil
BP has agreed terms to sell its interests in the Andrew area in the central UK North Sea and its non-operating interest in the Shearwater field to Premier Oil for $625mn. The sales are the latest step in BP’s planned programme of $10bn divestments by the end of 2020.
The deal includes BP’s operated Andrew assets – comprising the Andrew platform, the Andrew (62.75%), Arundel (100%), Cyrus (100%), Farragon (50%) and Kinnoull (77.06%) fields and associated subsea infrastructure. The company holds a 27.5% stake in the Shell-operated Shearwater field.
Commenting on the news, Ariel Flores, BP North Sea Regional President, said: ‘BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204 and ETAP (Eastern Trough Area Project) hubs. We’re adding advantaged production to our hubs through the Alligin, Vorlich and Seagull tieback projects. As a result of this focus, we have also now decided to divest our Andrew and Shearwater interests, believing them to be a better strategic fit for another owner.’
BP increased its interest in the giant Clair field west of Shetland from 28.6% to 45.1% in December 2018. The field is being developed in phases – Clair Ridge, the second phase development, started up in November 2018, targeting 640mn barrels of oil and peak production of 120,000 b/d. A third phase, Clair South, is under consideration.
The Quad 204 project – a redevelopment of the Schiehallion and Loyal fields west of Shetland – delivered first oil in May 2017. The project included the construction and installation of the Glen Lyon floating, production, storage and offloading (FPSO) vessel, a major upgrade and replacement of subsea facilities and an extensive drilling programme.
BP is also delivering a programme of subsea tiebacks in the North Sea. Alligin forms part of the Greater Schiehallion Area west of Shetland and will target 20mn boe and peak production of 12,000 boe/d. It is due on stream in 2020. Vorlich is targeting 30mn boe and peak production of 20,000 boe/d. It will be tied back to Ithaca Energy’s FPF-1 floating production facility in the central North Sea and is due onstream in 2020. Meanwhile, Seagull will be developed through BP’s ETAP hub in the central North Sea and is expected to initially produce around 50,000 boe/d. First oil from the project is expected in 2021.
The company is also making progress towards a final investment decision (FID) for the Murloch (formerly Skua) development, which could be a future subsea tieback to ETAP. It was also awarded a new exploration licence in the 31st Offshore Licensing Round announced by the Oil and Gas Authority (OGA) in June 2019. The BP-operated licence covers 10 blocks in Quadrant 209 in the west of Shetland area.