BP (LON:BP) is considering offloading stakes in three Canadian oil sands projects, Reuters has reported. The move will come with the blue-chip oil major looking to retreat from non-core businesses.
BP’s share price has slipped into the red in today’s session, having shed 0.30 percent to 445.30p as of 12:55 BST, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed 0.11 percent higher at 7,126.15 points. The group’s shares have gained more than 20 percent over the past year, but have given up some 12 percent in the year-to-date.
Sources with knowledge of the matter told Reuters this week that BP was considering the sale of its stakes in three Canadian oil sands projects. The group currently holds 50 percent in the Sunrise project near Fort McMurray, as well as a 50-percent stake in Pike, and is majority-owner of the Terre de Grace oil sands pilot project. The three assets are all located in northeastern Alberta.
The sources noted that the FTSE 100 group had discussed with advisers the possibility of selling the stakes. If the sale proceeds, BP will reportedly deploy capital in more attractive regions, such as the Permian basin in the US where the rate of return tends to be higher.
The news comes after FTSE 100 peer Royal Dutch Shell (LON:RDSA) recently inked a deal to offload $7.25 billion of oil sands in Canada as it looks to sell $30 billion worth of assets in the wake of its acquisition of BG Group.
As of April 19, the consensus forecast amongst 30 polled investment analysts covering BP for the Financial Times has it that the company will outperform the market. According to MarketBeat, the blue-chip oil major currently has a consensus ‘buy’ rating and an average price target of 519.40p. BP is scheduled to update investors on its first-quarter performance on May 2.