BP has agreed to sell stakes in the Magnus oil field and the Sullom Voe Terminal to EnQuest in a deal valued at $85m.

The deal includes 25% of BP’s 100% stake in Magnus, 25% of the company's interests in a number of associated pipelines and a 3% stake in the Sullom Voe Terminal (SVT) on Shetland, with options to acquire additional stakes

BP group chief executive Bob Dudley said: “EnQuest’s experience of investing in and extending the life of mature assets in the North Sea make them a natural operator of Magnus and Sullom Voe in this later phase of their life.

"We believe this will enable them to prolong the life of the assets, benefiting the region and creating additional value for both EnQuest and BP shareholders.

“In addition to investing in and growing our core businesses, BP will continue to seek innovative opportunities such as this to work with partners to maximise value creation from our entire portfolio.”

EnQuest is expected to meet the acquisition amount by sharing of future cash flow through the assets and as per the agreement, is not entitled to pay it upfront to BP.

Following approvals from partner, regulatory and other third parties, BP will transfer operatorship of both Magnus and SVT to EnQuest.

The divestiture of a part of its stake will not change BP’s rights to capacity in SVT.

As per the agreement terms, EnQuest can buy BP’s remainder stakes of 75% and 9% in Magnus and SVT respectively as well as its stakes in the associated pipelines, between 1 July 2018 and 15 January 2019, for a total of $300m.

Even if EnQuest does exercise the option, BP as per the deal will hold the right to retain 50% of net cash flows generated from the assets, up to $1bn, post recovery of consideration and adjustments.

Image: BP's world headquarters in St. James's, City of Westminster, London. Photo: courtesy of WhisperToMe.