BP PLC has reached an agreement to sell non-controlling interests in its US onshore midstream assets to private equity firm Sixth Street for $1.5 billion, marking a significant step in the energy major’s ongoing divestment strategy. The transaction comprises pipeline systems and infrastructure in the Eagle Ford and Permian basins, including four central processing facilities in the Permian region: Grand Slam, Bingo, Checkmate, and Crossroads, which connect production wells to third-party pipeline networks.
The sale will be executed in two phases, with around $1 billion to be paid immediately and the remainder expected before the end of 2025, subject to regulatory approvals. Upon completion, BP’s ownership in the Permian midstream assets will decrease from 100% to 51%, and in Eagle Ford assets from 75% to 25%, while Sixth Street will acquire the remaining non-operating interests. BP will retain operational control over all affected assets.
The deal forms a substantial contribution towards BP’s stated aim of achieving $20 billion in asset disposals by the end of 2027, a goal outlined during its Capital Markets Update in February 2025. The proceeds from this transaction will help BP streamline its portfolio, optimise investment returns, and continue its efforts to reduce net debt. BP’s US onshore division, bpx energy, will continue to operate the assets and emphasised the strategic importance of midstream investments for value generation and emissions reduction.
Kyle Koontz, CEO of bpx energy, said: “We are pleased to welcome Sixth Street as a co-owner in our Permian and Eagle Ford midstream assets. We recognised early on that investing in midstream would be an important ingredient to our success in these basins in terms of driving value, flow assurance, and lowering emissions. This transaction reinforces that we are on track to maximise the return on our investment in these basins and allows us to continue operating them safely and efficiently.”
This divestment is expected to enhance the non-controlling interest reflected on BP’s financial statements, with a projected annual income statement impact between $100 million and $200 million. Morgan Stanley & Co. LLC acted as BP’s financial advisor, with Hunton Andrews Kurth LLP providing legal counsel. The transaction demonstrates BP’s commitment to delivering value while maintaining strategic control and advancing its divestment programme amidst industry-wide investor pressure.
