UK oil assets on the block
7 Apr 2011
Shell, BP and INEOS all announce proposals to divest operations by the end of 2011
Asian-based companies are snapping up operations owned by the UK’s major oil companies, wtih Shell, BP and INEOS are all offloading assets.
Shell has accepted an offer from Essar Energy to buy its 272,000 barrels-per-day Stanlow refinery and associated local marketing businesses in the UK for a total expected consideration of some $1.3 billion (£799 million). The sale is expected to close by mid-2011.
The deal is in line with Shell’s strategy to focus its global manufacturing portfolio on what it terms larger and more “sophisticated” assets.
For its part, BP is aiming to sell its interests in a number of oil and gas fields in the UK by the end of 2011. The assets involved are the Wytch Farm onshore oilfield in Dorset and all of BP’s operated gas fields in the Southern North Sea, including associated pipeline infrastructure and the Dimlington terminal.
These divestments, says BP, will allow it to focus resources and investment on its diverse central North Sea, northern North Sea, West of Shetland and Norway assets, and on successful delivery of its new major projects.
According to Trevor Garlick, regional president, BP North Sea: “The assets we intend to divest are of high value but find it difficult to compete for capital and resource within our North Sea portfolio. We believe they will attract earlier investment and be of greater value to a new buyer.”
BP aims to complete the divestments around the end of 2011.
The third proposed deal has seen PetroChina offer $1 billion (£614 million) to buy a 50% share of INEOS Group’s European refining business, which includes the refineries at Grangemouth in Scotland and LavŽra in France.
According to the UK group, the deal will improve the long-term sustainability of the INEOS refineries, enhance security of supply for customers and secure jobs and skills in both the UK and France. It would lead to a partnership between INEOS and PetroChina comprising a trading joint venture and a refining joint venture - both to be operated independently of the INEOS Group and be formed in Q2 2011.
“This new partnership will secure investment and the long-term sustainability of both sites in a highly competitive market and ensure we continue to be Europe’s leading independent crude oil refiner,” said Calum MacLean, chief executive officer of INEOS Refining.
