BP to sell stakes in Bruce fields in the North Sea to Serica Energy

British energy giant BP plc today struck a deal to sell stakes in three fields in its Bruce assets in the North Sea to Serica Energy plc for upto £300 million ($398 million).

BP will sell its 36 per cent interest in Bruce, 34.83 per cent in Keith and 50 per cent in Rhum, but retain a 1 per cent stake in Bruce.

Under the terms of the agreement, Serica will pay BP an upfront payment of £12.8 million, a share of cash flows over the next four years, a consideration equivalent to 30 per cent of BP's post-tax decommissioning costs and several contingent payments dependent on future asset performance and product prices.

Overall, BP expects to receive payments of around £300 million, the majority of which will be received over the next four years.

The Bruce field was discovered in 1974 and came into production in 1993, with Keith tied back to Bruce in 2000. Rhum, a high-pressure, high-temperature satellite field located 40 kms to the north of Bruce, was brought into production in 2005.

The Bruce assets are expected to transition to Serica as a fully operational entity with around 110 employees who operate and support the assets expected to transfer with the business.

Serica said that it expects the deal to boost net production by seven fold to over 21,000 barrels of oil equivalent per day, of which over 85 per cent is gas.

Bernard Looney, BP chief executive, Upstream, said, ''This is an example of BP's Upstream strategy in action – refreshing our portfolio and focusing our activity on assets which will add most value over the long-term.''

''We remain committed to the North Sea and continue to invest. We expect our production there to double to around 200,000 barrels equivalent a day by 2020 through new projects like Quad 204 and Clair Ridge,'' he added.

''This transaction will establish Serica as a leading British independent oil company with the scale, balance sheet and operating capability to prosper in the North Sea's rapidly changing upstream oil and gas industry,'' said, Serica chairman Tony Walker.