LONDON�BP and Tullow Oil PLC yesterday finalized a deal through which the Irish independent will buy two packages of southern North Sea assets formerly held by ARCO through a $305 million cash-only transaction. The sale is designed to secure the European Commission�s approval for BP�s takeover of ARCO.
Under the deal, which will mark independent�s entry into UK offshore waters, Tullow will take on ARCO�s equity in 12 gas fields�Thames, Wensum, Yare, Bure, Bure West, Deben, Welland, Orwell, Gawain, Hewett, Murdoch, and Boulton�as well as some undeveloped satellite fields and exploration acreage. Included in the acquisition is ARCO�s equity in three pipelines�those of the Thames and Hewitt fields and the Caister-Murdoch system�as well as the oil company�s interest in the onshore Bacton gas processing terminal, operated by Phillips Petroleum Co. UK Ltd.
Production from the former ARCO fields, which hold remaining developed reserves in the region of 228 bcf, will mean an additional 150 MMcfd of gas for Tullow.
Tullow Managing Director Aidan Heavey said the acquisition met �all the targets� set out in the company�s recent strategic review and would �transform Tullow, provide sufficient production revenue to fund all [of its] foreseeable international exploration projects, and unlock significant upside potential offshore UK.�
Steve Marshall, BP�s regional president responsible for UK upstream E&P assets, said the sale, which has an effective date of Jan. 1, 2000, would �mark the completion of the required North Sea assets sale� called for by the EC.