According to persons familiar with the situation, BP Plc (BP.L) is considering selling a 49% share in its U.S. oil and gas pipeline network in the Gulf of Mexico to earn up to $1 billion.
The proposed divestiture would aid BP in achieving its goals to cut debt and preserve its dividend. BP’s net debt was $23.7 billion, even though it increased its shareholder payment by 10% in the second quarter’s profits in August. According to the sources, BP has transferred its interests in U.S. Gulf of Mexico pipelines to a new business, which will own 51% and sell the remainder.
The pipeline firm earns around $200 million in earnings before interest, taxes, depreciation, and amortization over 12 months. No settlement is certain, the sources said, and they asked for anonymity since the situation is private. BP opted against commenting.
According to its website, BP, one of the biggest oil and natural gas producers in the U.S. Gulf of Mexico, expects to generate around 400,000 barrels of oil equivalent per day from the area by the middle of this decade. It has five offshore platforms, with Argos, the fifth, starting in April. According to its website, BP owns holdings in several pipelines, including the 115-mile Cleopatra Gas Pipeline, the 89-mile Endymion Oil Pipeline, and the 161-mile Mars Oil Pipeline.
This would not be the first time BP has sold an interest in U.S. assets. The company is now conducting a leadership search following the resignation of previous Chief Executive Bernard Looney last month due to undeclared personal ties with workers.
It established a partnership in 2021 for infrastructure conveying refined goods, and for about $700 million, investment company Sixth Street Partners bought a 49% share in it. According to Bloomberg News, Sixth Street made a $400 million further investment last month.
