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Oil and gas rivals agree asset exchange in UK waters

Oil and gas  rivals agree asset exchange   in UK waters
BP and fellow British oil and gas operator BG Group have agreed a major swap of UK North Sea assets, with both companies saying the deal enhances their efficiency in core areas.

BP and fellow British oil and gas operator BG Group have agreed a major swap of UK North Sea assets, with both companies saying the deal enhances their efficiency in core areas.

Under the deal, BP will gain all of BG’s equity interests in the southern North Sea while BG will add to its portfolio BP’s interests in four central North Sea fields.

BP said the deal, in which no money is changing hands, was intended to strengthen its position as a major operator in the southern North Sea, while BG said the agreement would consolidate and strengthen its UK continental shelf interests.

On completion of the deal, expected in the second half of next year, about 90 BP offshore staff will transfer to BG under protection of employment regulations. No staff will transfer from BG to BP.

A small number of BP onshore staff are affected by the asset swap, but BP is to redeploy locally within the company all of the individuals involved.

BG Group proposes to acquire BP’s entire equity in the Everest, Lomond and Armada fields and part of its interest in the Erskine field, operated by Chevron.

BG will increase its equity in Everest, Lomond and Armada from about 60% to 80% and will become operator of Everest and Lomond. It already operates Armada.

The group is also to acquire 32% of Erskine from BP.

In return, BG will transfer to BP its interests in the Apollo, Artemis, Mercury, Minerva and Neptune fields, which are BG-operated, and in the BP-operated Wollaston and Whittle fields, along with its stake in the BP-operated Amethyst field.

The exchange – valued at about £300million – is said to be broadly neutral in value and production for both groups.

BG’s managing director for Europe and central Asia, Mark Carne, said: “By focusing on material interests in key hubs, we can increase efficiency and economically develop satellite fields.

“We have also shown with recent high-pressure, high-temperature finds that there is still significant potential in the central North Sea.”

Dave Blackwood, head of BP’s North Sea business, said: “This is an excellent outcome for both companies and for sustaining future investment. The deal allows us to operate more efficiently and therefore to maximise the value of our operations and infrastructure in the southern North Sea.”

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