BP has started looking for buyers for its North Sea oil and gas business just one day after Prime Minister Andy Burnham said he would take a “pragmatic” approach to fossil fuel extraction in the area.
Outlining the reason for the decision, BP said it was part of its “ongoing portfolio review” and was designed to maximise the company’s value.
The regulatory environment governing extraction in the North Sea has been turbulent in recent years, with the 2022 introduction of the Energy Profits Levy squeezing the profit margins of big oil firms after the war in Ukraine sent wholesale prices surging. Extraction operations in the North Sea are also more complex and expensive compared with equivalent oil fields in the US Permian Basin or the Middle East.
The North Sea is an ageing oil and gas basin – output reached its all-time high in 1999 but has since declined by more than 65%. It’s estimated that over 90% of the basin’s total commercial oil and gas has already been extracted.
“The North Sea...