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Will BP plc (BP) Divest the Largest Pipeline of North Sea?
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Energy giant BP plc (BP - Free Report) is discussing the prospects of divesting the Forties pipeline system with Ineos, the leading manufacturer of chemicals and oil products. The Forties pipeline system is considered to be the largest and oldest oil pipeline of the North Sea.
The pipeline extends over 100 miles and carries crude to the onshore terminal at Cruden Bay from the Unity platform located off the coast of the North Sea. Originally, the pipeline system was constructed to transport crude to the Grangemouth refinery from the Forties field. The oil field was discovered in 1970. In 2003, BP divested its stake in the Forties field to upstream energy player Apache Corporation (APA - Free Report) .
Notably, both BP and Ineos have confirmed their willingness for the transaction. The companies started discussions on the matter in the first half of 2016. Though the deal was expected to have fallen through owing to the disagreement of the companies over pricing the properties, it now seems that the transaction was kept under wraps all along.
Once the final deal is reached between the firms, BP will likely share the development with the stakeholders of the pipeline as well as the system’s 300 staff.
London-based BP is one of the largest integrated energy firms in the world and its shares have gained 8.6% over the last one year, outperforming the Zacks categorized Oil & Gas-International Integrated industry’s increase of 4.6%. BP's stock price movement is also better than other energy majors like Royal Dutch Shell plc and Exxon Mobil Corporation (XOM - Free Report) . Shell’s stock appreciated almost 6%, while Exxon Mobil’s stock depreciated 2.5% during the same time period.
However, the oil spill incident of 2010 in the BP-operated Macondo Prospect is still affecting the company. Although BP has cleared the huge litigation expenses related to the spill, it had to divest some of its best operating properties. The asset sales might hinder BP’s future cash generating opportunities going forward. It is to be noted that the lost reserves/production from the group's asset sales cannot be ignored either.
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Will BP plc (BP) Divest the Largest Pipeline of North Sea?
Energy giant BP plc (BP - Free Report) is discussing the prospects of divesting the Forties pipeline system with Ineos, the leading manufacturer of chemicals and oil products. The Forties pipeline system is considered to be the largest and oldest oil pipeline of the North Sea.
The pipeline extends over 100 miles and carries crude to the onshore terminal at Cruden Bay from the Unity platform located off the coast of the North Sea. Originally, the pipeline system was constructed to transport crude to the Grangemouth refinery from the Forties field. The oil field was discovered in 1970. In 2003, BP divested its stake in the Forties field to upstream energy player Apache Corporation (APA - Free Report) .
Notably, both BP and Ineos have confirmed their willingness for the transaction. The companies started discussions on the matter in the first half of 2016. Though the deal was expected to have fallen through owing to the disagreement of the companies over pricing the properties, it now seems that the transaction was kept under wraps all along.
Once the final deal is reached between the firms, BP will likely share the development with the stakeholders of the pipeline as well as the system’s 300 staff.
London-based BP is one of the largest integrated energy firms in the world and its shares have gained 8.6% over the last one year, outperforming the Zacks categorized Oil & Gas-International Integrated industry’s increase of 4.6%. BP's stock price movement is also better than other energy majors like Royal Dutch Shell plc and Exxon Mobil Corporation (XOM - Free Report) . Shell’s stock appreciated almost 6%, while Exxon Mobil’s stock depreciated 2.5% during the same time period.
However, the oil spill incident of 2010 in the BP-operated Macondo Prospect is still affecting the company. Although BP has cleared the huge litigation expenses related to the spill, it had to divest some of its best operating properties. The asset sales might hinder BP’s future cash generating opportunities going forward. It is to be noted that the lost reserves/production from the group's asset sales cannot be ignored either.
As a result, BP carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>