BP Considers Selling Stakes in Gulf of Mexico Oil Projects

BP is reportedly considering selling minority stakes in two of its most valuable Gulf of Mexico oil projects—Kaskida and Tiber—as part of a strategic shift to prioritize oil and gas assets. According to sources familiar with the matter, the potential divestments could involve selling up to 50% of each project, which are estimated to be worth billions of dollars. While discussions are still in the early stages, a formal sales process may be initiated later this year.

This move comes as BP shifts away from its previous focus on clean energy towards a renewed emphasis on traditional oil and gas investments. The company is now looking to bring in partners for Kaskida and Tiber, both of which are fully owned and considered among BP’s most promising ventures in the Gulf.

During a recent capital markets day, BP CEO Murray Auchincloss stated, “If somebody wants to come and make a knockout bid on 25% of Kaskida, we’re open to it, but it has to be for value.” Industry insiders suggest that potential buyers could be other major energy companies operating in the region, although the outcome of any potential deals remains uncertain. BP has declined to comment on the matter.

Kaskida and Tiber are located within the Paleogene geological formation, where BP has identified resources equivalent to 10 billion barrels of oil and gas. According to Miles Sasser, a senior research analyst at Wood Mackenzie, both projects are valued in the billions of dollars from a present value perspective for BP.

BP currently operates five major projects in the U.S. Gulf, with Kaskida, recently approved by the company in July, set to become the sixth. Production at Kaskida is expected to commence in 2029, with output reaching up to 80,000 barrels of crude oil per day. Tiber could potentially follow suit, pending a final investment decision later this year.

At the recent CERAWeek energy conference, Auchincloss reiterated that the U.S. and the Middle East will play a central role in BP’s revised oil and gas strategy. The company is also pursuing a broader $20 billion divestment plan through 2027, aimed at reducing its debt from around $23 billion to between $14 billion and $18 billion.

Overall, BP’s potential sale of stakes in Kaskida and Tiber reflects a strategic shift towards prioritizing traditional oil and gas assets in the Gulf of Mexico, as the company looks to optimize its portfolio and financial position in the evolving energy landscape.

(Reuters)