BP has entered agreements to acquire from ConocoPhillips a 16.5% interest in the BP-operated Clair field, west of Shetland in the UK, and to sell to ConocoPhillips its entire 39.2% interest in the Greater Kuparuk Area on Alaska’s North Slope and holding in the Kuparuk Transportation Company.
Following the Clair field interest sale, BP will hold a 45.1% interest in Clair, and ConocoPhillips will retain a 7.5% interest. 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. The transactions, which will be subject to state of Alaska, US federal and UK regulatory approvals and other approvals, are expected to be completed in 2018.
“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 oil field for our North Sea business, a giant resource whose second phase is about to begin production, and which holds great potential for future developments,” said BP Upstream Chief Executive Bernard Looney.
“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.”
The giant Clair field west of Shetland has a complex fractured reservoir estimated to have had more than 7 billion bbl 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 bbl of oil equivalent a day (boed) in 2017. A major second development phase, Clair Ridge, is expected to start production later this year with production capacity of 120,000 boed. Appraisal has also identified potential for future stages of development of Clair.
The current Clair partners are: BP, operator, 28.6%; ConocoPhillips, 24%; Shell UK, 28%; and Chevron North Sea, 19.4%. The Clair partners are now evaluating a potential third phase of development of the field.
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 bbl/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 at Pump Station 1.
The transaction will not affect BP’s position as operator and co-owner in the Prudhoe Bay oilfield in Alaska.