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BP to Divest Interests in Bruce Assets to Serica Energy

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BP plc (BP - Free Report) has decided to divest a package of interests in the Bruce assets in the North Sea to Serica Energy plc. The company expects to conclude the sale and transfer of operatorship in the third quarter of 2018, subject to various approvals.

The assets, which consist of the Bruce, Keith and Rhum fields along with three bridge-linked platforms and related subsea infrastructure, are currently operated by BP.

Per the agreement, BP will receive an initial payment of £12.8 million from Serica Energy. In total, BP anticipates payments of roughly £300 million from the transaction. Investors should know that the integrated energy player will get the lion’s share of the expected proceedin the coming four years.

Discovered in 1974, the Bruce field was commissioned in 1993. Keith was tied to it in 2000. Rhum — a high pressure, high-temperature satellite field located 40 kilometers to the north of Bruce — was brought online in 2005.

In a separate announcement, BP and Eni SpA (E - Free Report) have reportedly expressed interest in developing the massive Majnoon oilfield, from where Royal Dutch Shell plc intends to exit in 2018.

Per Iraqi oil officials,, Royal Dutch Shell intends to handover the operations of the field to the state-run Basra Oil Co. by the end of June 2018.

However, BP and Eni have not disclosed any details. The oil ministry has not yet commenced talks with either company.

Further, two other oil giants — Chevron Corp (CVX - Free Report) and Total SA — expressed interest in developing the Majnoon oilfield in October 2017.

With so many contenders, the oil minister proposes to directly supervise the operations in the field in order to find a suitable foreign partner.

Price Performance

The company’s shares have returned 5.9% compared with the industry’s rally of 4.6% in the past six months.



 

Zacks Rank

BP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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