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BP to sell part of interests in Magnus field and Sullom Voe terminal in UK North Sea to EnQuest

25th January 2017

BP has announced it has agreed to sell part of its interests in the Magnus oil field and some associated pipeline infrastructure in the UK northern North Sea and in the Sullom Voe Terminal (SVT) on Shetland to EnQuest.

BP sale
BP sale

Included in the agreement are: 25% of BP’s 100% stake in Magnus, 25% of BP’s interests in a number of associated pipelines and a 3% interest in the Sullom Voe Terminal from BP Exploration Operating Company Limited’s (BPEOC) current total 12% stake. The sale price of $85 million is expected to be met by EnQuest from the sharing of future cash flows from the assets and the agreement will not include any upfront payment to BP.

Subject to partner, regulatory and other third party approvals, operatorship of both Magnus and SVT will transfer from BP to EnQuest on completion. The sale will not affect BP’s rights to capacity in SVT.

Under the terms of the agreement, EnQuest has an option, exercisable between 1 July 2018 and 15 January 2019, to purchase BP’s remaining 75% interest in Magnus, a further 9% interest in SVT and the remainder of BP’s interests in the associated pipelines for a consideration of $300 million. Under this option, after recovery of consideration and adjustments, BP would also retain 50% of net cash flows from these assets, up to a limit of $1 billion. The consideration for this further acquisition would be met by EnQuest through a mixture of cash and future asset cash flows.

BP group chief executive Bob Dudley commented: “EnQuest’s experience of investing in and extending the life of mature assets in the North Sea make them a natural operator of Magnus and Sullom Voe in this later phase of their life. We believe this will enable them to prolong the life of the assets, benefiting the region and creating additional value for both EnQuest and BP shareholders. In addition to investing in and growing our core businesses, BP will continue to seek innovative opportunities such as this to work with partners to maximise value creation from our entire portfolio.”

 

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