BP and ConocoPhillips have signed an agreement which will see BP take ConocoPhillips’ stake in the Clair field in the North Sea. In a separate transaction, BP will sell its non-operating interest in Kuparuk and satellite oilfields in Alaska to ConocoPhillips.
As for the Clair field, BP will buy from ConocoPhillips a 16.5% interest in the BP-operated Clair field, west of Shetland in the UK. This will be done through the acquisition of a ConocoPhillips subsidiary that will hold this interest in the field. As a result, BP will hold a 45.1% interest in Clair and ConocoPhillips will retain a 7.5% interest.
The giant Clair field west of Shetland has a complex fractured reservoir estimated to have had more than 7 billion barrels of hydrocarbons originally in place. The field is operated by BP which currently holds a 28.6% interest. Production from Clair’s first phase of development began in 2005 and the field produced an average of 21,000 barrels of oil equivalent a day (boed) in 2017.
A major second development phase, Clair Ridge, is expected to start production later this year with a production capacity of 120,000 boed. Appraisal has also identified potential for future stages of development of Clair.
Separately BP has entered into agreements to sell to ConocoPhillips BP’s entire 39.2% interest in the Greater Kuparuk Area on the North Slope of Alaska as well as BP’s holding in the Kuparuk Transportation Company.
The Greater Kuparuk Area is operated by ConocoPhillips Alaska. The Greater Kuparuk Area includes the Kuparuk oilfield and the satellite fields of Tarn, Tabasco, Meltwater and West Sak. In 2017, the Greater Kuparuk Area had average daily gross oil production of approximately 108,000 barrels a day. The agreement will also include BP’s interest in the Kuparuk pipeline, which transports oil from the Greater Kuparuk Area to the inlet of the Trans-Alaska Pipeline (TAPS) at Pump Station 1.
The transaction will not affect BP’s position as operator and co-owner in the Prudhoe Bay oilfield in Alaska, BP said.
Details of the transactions are not being disclosed but, excluding customary adjustments, the transactions together are expected to be cash neutral for BP and ConocoPhillips, BP said in a statement. The transactions, which will be subject to the State of Alaska, US federal and UK regulatory approvals and other approvals, are anticipated to complete in 2018.
BP Upstream chief executive Bernard Looney: “This is a further step in focusing our portfolio around core assets and developments which have the potential for significant growth. Clair is a key advantaged oilfield for our North Sea business, a giant resource whose second phase is about to begin production and which holds great potential for future developments.”
“In Alaska, this transaction will increase our focus on managing our deep resource base at the massive Prudhoe Bay oilfield and help enable a more competitive and sustainable business for BP.”
“These transactions are significant for ConocoPhillips because they continue our strategy of coring up our legacy asset base in Alaska, while retaining an interest in the Clair Field in the U.K.,” said Ryan Lance, chairman and chief executive officer.
“We have a long history of creating value in Alaska and an ongoing commitment to invest in our legacy assets, as well as in the development of our recent exploration success. Likewise, we are committed to maximizing the value of our assets in the U.K. North Sea, including continued investment in our operated assets in the Central North Sea.”