BP Considers Selling $1 Billion Stake In Its Gulf Of Mexico Pipeline Network - OilPrice.com
BP Considers Selling $1 Billion Stake In Its Gulf Of Mexico Pipeline Network | OilPrice.com
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BP is considering selling 49% of its oil and gas pipeline network on the U.S. Gulf Coast, eyeing proceeds of $1 billion, Reuters has reported, citing unnamed sources.
The supermajor has already organized its pipeline stakes into a separate company, in which it plans to keep 51% and sell the rest to fund future dividend payouts and pay down debt, which stands at $23.7 billion.
According to Reuters sources, the assets generate annual EBITDA of some $200 million.
BP is among the biggest oil and gas producers in the U.S. Gulf of Mexico, with average daily output of some 400,000 barrels of oil equivalent.
BP is in a bit of a leadership pickle right now after chief executive Bernard Looney stepped down for failure to disclose personal relationships with company employees.
Before the news broke, Looney had just made a U-turn on BP’s transition ambitions after he formulated these ambitions three years ago when he took the helm.
The supermajor started spending more on low-carbon energy and committed to slashing its oil and gas production but it turned out the low-carbon business was not generating the expected returns.
At the same time, BP has been shrinking its exposure to some legacy oil regions such as the Canadian oil sands and the North Sea.
Last year, BP raked in a record profit like the rest of the industry amid the energy supply squeeze following Russia’s invasion of Ukraine. Since then, profits have fallen in tune with oil prices but the supermajor has maintained its lucrative dividend to keep shareholders happy.
Its latest financial report, for the second quarter, revealed a 70% drop in net income from a year earlier but BP nevertheless boosted its dividend by 10% and said it will continue buying back shares.
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By Charles Kennedy for Oilprice.com
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Hydrogen, long seen as a theoretical if not practical alternative to petroleum-based transportation fuels, is once again having a day in the sun as industries promote “green hydrogen,” produced using renewable resources.