British oil major BP has said it is selling off its North Sea business in an overhaul under its new chief executive to raise profitability.
Meg O'Neill's announcement on Friday accelerates the restructuring of the firm, but she acknowledged the strategic importance of the announcement to its home country.
“The North Sea remains integral to the UK's energy system,” she said. “We believe our North Sea business will be better positioned as part of another company.”
The business has been restructured this month into two segments from three as it seeks to turn the corner on a period in the doldrums.
The international focus on the North Sea poses a litmus test for the new British government.
Prime Minister Andy Burnham said on Thursday that he told President Donald Trump the UK would not “ignore” its resources in the North Sea.
Mr Burnham said he had told the US President that he would take a “pragmatic” approach “and that is my intention as we go forward from here” during the two leaders' first conversation last week.
“There is a resource there,” Mr Burnham added. “When people are struggling, we can’t ignore that. Hence me indicating that to the president.”
Mr Burnham’s remarks suggest he is prepared to back new drilling for oil and gas as soon as September. Officials are exploring a range of options including approving proposals at the Jackdaw and Rosebank fields off the coast of Scotland, and the expansion of so-called tie-backs which allow further drilling on or near existing ones.
The UK Prime Minister's remarks came after Mr Trump on Wednesday said Mr Burnham had told him he was going to “open up the North Sea” for more drilling, a policy the US President has repeatedly proposed. Mr Trump said the prospect was “one very good thing” and added: “You’re going to be a wealthy country, if he does it reasonably.”
BP has worked in the North Sea for more than six decades and operates five major production hubs in the region, including the Clair oilfield, the largest on the UK continental shelf.
The company, which is expanding in countries including the US and Brazil, generated about 5 per cent of its oil and gas output from the British North Sea last year, around 117,000 barrels out of a total of 2.3 million barrels of oil equivalent per day.
