BP Plc and ConocoPhillips are in discussions for an asset swap deal that would see the U.K. energy major gain a greater foothold in a key project in the North Sea and the U.S. explorer get Alaskan assets, according to people familiar with the talks.
BP is considering taking Conoco’s stake in the Clair field, in which BP already holds a 28.6 percent stake and is the operator, the people said, asking not to be identified because the talks are private. In exchange, Conoco is likely to take some of BP’s assets in Alaska. BP describes Clair as “the largest undeveloped hydrocarbon resource” in the U.K.
The world’s biggest oil companies, including BP, have largely been selling their aging North Sea assets as they move funds to areas where it’s cheaper to produce oil and natural gas. Still, the area has seen a revival in recent years as new entrants infuse additional capital and fresh technology. BP itself has said it will focus on a few projects as it targets increasing output from the region.
No final decisions have been reached between the companies and talks could still fall apart. A BP spokesman declined to comment. Conoco is not looking to sell its U.K. North Sea assets, Chief Executive Officer Ryan lance said at the company’s annual general meeting this week.
“Unless formally announced by the company, we don’t comment on business development activity,” Emma Ahmed, a spokeswoman for Conoco, said by email.
The people didn’t say which Alaskan assets BP is putting on the table. The biggest of its fields there is Prudhoe Bay, which started production in in the 1970s.
Conoco has been reducing its exposure to the U.K. as fields age, and is keen to focus more on U.S. shale, one of the world’s fastest-growing oil-producing regions. The Houston-based explorer said in April it intended to cut 450 jobs in Britain between Oct. 1 and April 2020 as it ceased output through its Theddlethorpe Gas Terminal.