BP explores UK North Sea asset sale as portfolio reshaping continues

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BP North Sea asset sale

Highlights

BP held advanced talks to sell its UK North Sea assets to Ithaca Energy for nearly £2 billion, but discussions recently stalled.
BP continues to seek asset sales amid leadership changes and a plan to restructure around oil and gas, targeting $20 billion of divestments by 2027.
North Sea sector faces consolidation as companies like TotalEnergies, Shell, and Equinor merge regional assets, responding to heavy taxes and resource declines.

Talks with Ithaca and restructuring plans

As first reported by Financial Times, BP held advanced talks to sell its UK North Sea assets to Ithaca Energy in a deal valued at close to £2 billion, although those discussions have failed in recent weeks.

The company is still exploring a transaction and could pursue a deal with other bidders, according to people familiar with the process. BP and Ithaca already jointly operate the Vorlich oilfield east of Aberdeen, linking the two groups in the basin even as the latest sale talks do not result in an agreement.

The potential disposal comes as BP undergoes a leadership transition. Albert Manifold is sacked as chair last week, less than two months after O’Neill takes charge with a plan to restructure the company around a renewed emphasis on oil and gas production.

BP has operated in the North Sea for 60 years and remains one of the basin’s largest players, but its UK fields account for about 120,000 barrels a day out of total company production of 2.3 million barrels. Soon after starting in the role, O’Neill says she sees untapped potential in the UK North Sea while also warning against further windfall taxes on the sector.

North Sea consolidation and policy pressure

The possible sale emerges as the UK North Sea continues to consolidate under pressure from heavy taxes and declining resources. Oil producers also remain cautious about UK energy secretary Ed Miliband, a strong supporter of renewable power, while President Donald Trump is pressing the UK to expand drilling in the region.

BP is reviewing a wide range of disposals across its global portfolio, including parts of its petrol station networks and renewable energy operations. Last year it sold a majority stake in its $10 billion lubricants unit Castrol to help cut debt, and the company has pledged to deliver $20 billion of divestments by 2027 after pressure from activist hedge fund Elliott Management.

Other large energy groups are also reshaping their North Sea positions. In December, TotalEnergies moved to combine assets that produce roughly a quarter of the UK’s gas into Neo Next+, while in 2024 Shell and Equinor merged their regional businesses into a 50-50 joint venture called Adura. BP and Ithaca decline to comment.

Our earlier article on the UK’s proposed seventh carbon budget outlined plans for a legally binding target to cut greenhouse gas emissions 87% from 1990 levels by 2040, with parliament due to vote by the end of June. We noted the growing political pushback over costs and power prices, even as the government points to billions in announced private clean-energy investment and highlights progress in reducing emissions since 1990.

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