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BP raises £785m to pay off debt after selling down Aker BP stake
BP has sold a five per cent stake in Norwegian oil and gas company Aker BP for about £785m, raising cash to reduce its debt. The sale supports the energy group’s stated priority of strengthening its balance sheet as it prepares a new long-term strategy.
The shares were sold for 311 Norwegian crowns each, around 12 per cent below Aker BP’s previous closing price; BP retains nearly an 11 per cent stake. BP also raised its full-year asset sale target by $1bn to about $9bn, after reporting third-quarter earnings of $8.5bn. Its debt has fallen by half over the past year to $13.9bn, with a further $6bn reduction expected from the sale of Castrol.
In short
- BP raised £785m by selling part of its Aker BP stake.
- It retains nearly 11 per cent of the Norwegian company.
- The sale supports BP’s drive to reduce debt.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Selling part of its Aker BP stake gives BP substantial cash to reduce debt and strengthen its balance sheet, which could make the company more resilient and better able to carry out its long-term strategy. The discounted share sale may be a reasonable price for making that progress promptly, while BP still retains a sizeable interest in Aker BP.
The case against
Selling a profitable energy asset at a discount may sacrifice future income and value for a near-term improvement in BP’s debt figures. Critics could argue that asset disposals and a higher sales target do not by themselves show whether BP’s coming strategy will deliver durable returns or address the risks of relying on oil and gas.