BP has reportedly engaged in advanced discussions regarding the sale of a significant portion of its UK North Sea assets to Ithaca Energy, in a deal estimated to be worth approximately £2 billion. However, these negotiations are understood to have stalled in recent weeks, according to reports from the Financial Times. Despite the current impasse, BP is continuing to evaluate options for its North Sea portfolio, indicating that a transaction with another prospective buyer remains a possibility.
BP has maintained a presence in the North Sea for over six decades, establishing itself as one of the basin’s largest producers. Nevertheless, its UK assets contribute a comparatively modest share to its overall output, accounting for around 120,000 barrels of oil equivalent per day (boe/d) against the company’s global production of 2.3 million boe/d.
The reported discussions align with BP’s broader strategic restructuring under its new Chief Executive Officer, Meg O’Neill, who assumed the role on 1 April 2026.
The energy major is pursuing an ambitious target of divesting $20 billion (£15.7 billion) in assets by 2027. This divestment programme aims to reduce the company’s debt burden and streamline its global portfolio, a strategy that has faced increased scrutiny from activist investor Elliott Management. Elliott Management, which held a significant stake in BP in early 2025, has advocated for a sharper focus on profitability and capital discipline.
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A successful divestment of BP’s North Sea holdings would reflect an ongoing trend of consolidation within the UK North Sea basin. This trend is driven by a combination of factors, including the mature nature of many assets and an increased tax burden on operators.
Recent examples of this industry consolidation include TotalEnergies merging its UK upstream business with NEO NEXT (which comprised NEO Energy and Repsol UK assets) to form NEO NEXT+, now recognised as the UK Continental Shelf’s largest independent oil and gas producer.
Similarly, Shell and Equinor finalised their 50/50 joint venture, Adura, in December 2025, which has been positioned as the largest independent North Sea producer.
