BP share price surges as group offloads North Sea pipeline

on Apr 3, 2017
Updated: Oct 21, 2019
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Shares in BP (LON:BP) have gained nearly one percent in London this morning, outperforming the broader market after the company said that it had sold the North Sea’s biggest pipeline to petrochemical giant Ineos. The FTSE 100 group is set to get up to $250 million from the deal.

As of 10:00 BST, BP’s share price had added 0.81 percent to stand at 461.27p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.04 percent worse off at 7,320.14 points. The group’s shares have gained some 34 percent over the past year, but have given up nearly 10 percent so far in 2017.
BP announced in a statement this morning that it had agreed to sell its Forties Pipeline System (FPS) business, with assets including the main Forties offshore and onshore pipelines and other associated pipeline interests and facilities, to Ineos. Under the terms of the deal, the FTSE 100 group will receive a consideration of up to $250 million for the business, comprising a cash payment of $125 million on completion and an earn-out arrangement over seven years totalling up to $125 million.

“BP is returning to growth in the North Sea as we bring important new projects,” the group’s chief executive Bob Dudley commented in the statement. “While the Forties pipeline had great significance in BP’s history, our business here is now centred around our major offshore interests west of Shetland and in the Central North Sea.”
The move comes after FTSE 100 peer Royal Dutch Shell (LON:RDSA) agreed to offload a package of UK North Sea assets to Chrysaor earlier this year as part of its $30-billion divestment programme.
In analyst news, BNP Paribas reiterated its ‘outperform’ rating on BP last week, valuing the shares at 560p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 519.40p.
As of 10:31 BST, Monday, 03 April, BP plc share price is 462.70p.

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