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46

BP to cut assets in Gulf of Mexico

BP is looking to reduce the number of operatorships it holds in the Gulf of Mexico as part of a move to cut its capital spending and rebalance its portfolio of assets in the wake of the Macondo oil spill.

The UK oil group produces from more than 20 deepwater fields in the Gulf of Mexico and is the biggest operator in the region, as well as the largest licence holder.

Until the accident on April 20, the US was BP’s principal strategic focus but the company faces a challenge to restore its reputation.

It plans to raise up to $30bn (£19bn) from asset disposals within the next 18 months and has said it will cut capital spending by about 10 per cent this year to raise funds to help pay for the costs of the spill.

Analysts have said it would make sense for BP to realise some of the value of the licences it holds in the Gulf of Mexico and people familiar with the matter confirmed BP was considering reducing the number of operatorships it holds there.

Bob Dudley, BP chief executive, told the Financial Times earlier this week that while there might be some asset sales in the US, it would remain an area of strategic focus. 

BP declined to comment but on Friday confirmed it has relinquished its operatorship at Tubular Bells, a deepwater field discovered in 2003 and about 135km southeast of New Orleans, to Hess, the US company.

Hess will pay $40m for an additional 20 per cent stake, raising its holding to 40 per cent.

BP will retain a 30 per cent stake.

BP had said in March it intended to make a final investment decision on the field later this year.

BP is making progress with its asset sales. The company has so far raised almost $10bn, notably from a $7bn sale of onshore gas assets in the US, Canada and Egypt to Apache, the US independent oil and gas group.

Apache had been in talks with BP about taking a stake in its Alaskan fields but that deal foundered.

BP is considering an alternative plan which would see it transfer the operatorship of the Prudhoe Bay field to one of its existing partners, and then selling a stake.

Analysts said Apache and Occidental were potential buyers of the stake.

BP has been in talks with TNK-BP, its Russian joint venture, about several asset sales.

A formal offer for BP’s assets in Venezuela and Vietnam could come as early as next week.

Tony Hayward, who resigned as chief executive of BP after the spill, is joining the board of TNK-BP.

BP’s shares rose 3 per cent to 440.9p on Friday.

Source : Financial Times