BP builds up North Sea portfolio

LONDON, Nov. 29 (UPI) -- A day after taking a greater stake in offshore Egyptian reserves, British energy company BP said it was taking on a larger role in the North Sea.

The British company said it was taking on some of the interest held by Norwegian energy company Statoil in the Jock Scott reserve basin and an additional stake in the Craster prospect, held by Canadian energy company Nexen.

BP said it was planning to start new drilling with both Nexen and Statoil in the North Sea by the middle of next year.

"Working together with companies such as Statoil and Nexen to access the North Sea's remaining resource is an important part of our strategy to remain a material North Sea producer, investor and employer for decades to come," Mark Thomas, BP's regional president, said in a statement.

Overall, BP said it plans to drill up to five exploration wells over the next 18 months and 50 development wells over the next three to four years. The company estimates total regional production will reach 200,000 barrels per day by the end of the decade.

Lower crude oil prices, relatively unchanged from one year ago, but more than 40 percent below the level from two years ago, have forced some oil and gas companies to cut back on exploration and production activity, particularly in the maturing North Sea.

Deirdre Michie, the chief executive of trade body Oil & Gas U.K., said companies have started to grow accustomed to a market where crude oil is trading in the upper $40-per-barrel range, but the British decision in June to leave the European Union is something of a distraction for an economic sector that depends in part on external markets for success.

BP this week moved in alongside Italian energy company Eni to build a position in an oil and gas concession in the Mediterranean Sea off the coast of Egypt that's considered one of the region's largest.

BP reported third quarter profits were down nearly 50 percent from last year as lower crude oil prices continue to put pressure on revenue streams.