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Market Chatter: BP In Talks to Sell $2.7 Billion UK North Sea Assets to Ithaca

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BP (BP) held advanced talks to sell its UK North Sea oil and gas assets to Ithaca Energy in a deal that could have been worth close to 2 billion British Pounds ($2.7 billion), but negotiations have recently stalled, the Financial Times reported, citing industry sources.

Though the talks did not result in an agreement, BP could still revive discussions with Ithaca or pursue a transaction with other potential buyers.

The planned divestment forms part of BP's broader effort to streamline its portfolio and raise cash as CEO Meg O'Neill pushes ahead with a restructuring of the energy major.

BP and Ithaca, a subsidiary of Israel's Delek Group, already operate several assets together, including the Vorlich oilfield east of Aberdeen.

BP did not immediately reply to a request for comment by.

Though BP has been active in the North Sea for about six decades and remains one of the basin's largest producers, its UK operations account for about 120,000 barrels of oil equivalent per day, a fraction of the group's total production of about 2.3 million barrels of oil equivalent per day.

O'Neill said she saw "untapped potential" in the UK North Sea shortly after taking the helm, but said that further windfall taxes on producers could deter investment.

BP is reviewing a range of assets as part of a wider restructuring, including potential disposals across its global portfolio. The British energy major has also examined options for some of its fuel retail networks and renewable energy businesses.

Last year, BP sold a majority stake in its lubricant business, Castrol, as part of efforts to reduce debt. The company has pledged to deliver $20 billion of divestments by 2027 after coming under pressure from activist investor Elliott Management to improve returns.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Price: $43.40, Change: $+0.46, Percent Change: +1.07%

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