BP share price: Group unveils joint venture with Det norske

BP (LON:BP) has teamed up with Det norske oljeselskap to form a new joint venture, set to become Norway’s biggest independent oil and gas producer, the London-listed oil major has said. The new company will be separately listed on the Oslo Stock Exchange.

BP’s share price has fallen into the red in London this morning, having shed 1.17 percent to stand at 369.76p as of 10:38 BST, as part of a broader market selloff which has seen the benchmark FTSE 100 index shed 1.43 percent to 6,142.94 points so far in today’s trading. Det norske’s shares meanwhile are rallying, having added 8.87 percent to NOK91.45.
BP and Det norske announced this morning that they had agreed to combine their Norwegian assets to create a new joint venture company, Aker BP ASA, independently operated and listed on the Oslo Stock Exchange. Under the terms of the deal, BP, which will hold 30 percent in the new venture, will receive a cash payment of $140 million, as well as positive working capital adjustments as part of the transaction.

“BP and Aker have matured a close collaboration through decades, and we are pleased to take advantage of the industrial expertise of both companies to create a large independent E&P company,” BP’s chief executive Bob Dudley commented in the statement, adding that the Norwegian Continental Shelf represented “a significant opportunity going forward”.
BP, which has been struggling with the low oil price environment alongside peers, has been looking for ways to shore up its balance sheet and.
“Whilst the deal is small from BP’s point of view, we’d view both the receipt of cash and the continued interest through a 30 percent stake in the new entity positively,” Exane BNP Paribas wrote in a note to clients, as quoted by Bloomberg.
As of 10:57 BST, Friday, 10 June, BP plc share price is 369.52p.