BP has formally initiated the sale of its entire North Sea oil and gas portfolio; a move poised to conclude six decades of operations in the basin and which has sparked considerable debate across the UK energy sector.
The portfolio, encompassing interests in over 20 fields and five major production hubs, is estimated to be worth around £2 billion. This strategic divestment places approximately 1,100 Aberdeen-based BP workers in an uncertain position.
The decision, announced after BP reported robust second-quarter profits, was framed by new Chief Executive Meg O’Neill as a rigorous focus on the firm’s “highest-value opportunities”.
Speaking to CNBC, Ms O’Neill explained: “When we look at how it fits into our portfolio today it just doesn’t compete for capital.”
She further clarified that the North Sea assets, while possessing “untapped oil and gas potential,” no longer align with BP’s capital allocation strategy, which prioritises growth in regions such as the US Gulf of America, the Middle East, and Brazil.
The company’s new chief, who previously led Australian oil giant Woodside Energy and held senior roles at ExxonMobil, is steering BP towards a sharper focus on investor returns and debt reduction.
The announcement has reignited criticism of the UK’s Energy Profits Levy (EPL), commonly known as the windfall tax.
Russell Borthwick, Chief Executive of the Aberdeen and Grampian Chamber of Commerce, asserted that BP’s decision should serve as a defining moment for Prime Minister Andy Burnham: “This decision is another stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry.”
The UK government, under Chancellor Rachel Reeves, increased the EPL tax rate by three percentage points in November 2024, pushing the total headline tax on North Sea profits to 78% – a rate comparable to Norway and among the highest globally.
Despite industry concerns, interest in BP’s North Sea assets remains strong. Reports from June, indicating a potential £2 billion sale to Ithaca Energy, seem to have stimulated market appetite. Ms O’Neill confirmed during an analyst call that BP had received “a number of inbounds,” which acted as “a bit of a catalyst for launching the process.”
Potential bidders are believed to include the Neo Next+ operation (a consortium of TotalEnergies, Repsol, and HiTecVision) and Ithaca Energy. Private equity firms have also been active in acquiring North Sea assets from major players in recent years.
The profitability of North Sea operations has been underscored by recent half-year results from Harbour Energy. The company reported a profit after tax of $600 million for the first half of 2026 and anticipates generating $1.8 billion in free cash flow for the year, alongside a new $250 million share buyback.
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Harbour, despite previously citing the windfall tax for job cuts, has recently acquired UK North Sea assets, including a portfolio from Waldorf Production for $163 million and a 45% stake in the Ithaca-operated Fotla oil and gas discovery. These results highlight significant earnings for North Sea operators amidst a surge in oil and gas prices, exacerbated by the “US-Israeli war on Iran” and broader Middle East conflict.
Environmental groups, however, have voiced outrage at these profits. Rosie Hampton, oil and gas campaigns manager for Friends of the Earth Scotland, criticised politicians for backing industry calls to end the windfall tax:
“When you see the disgusting profits reaped by Shell, BP and their allies, who are also rolling back on green energy promises and laying off workers, it is infuriating that politicians are siding with them instead of the public,” Ms Hampton commented.
