By Sarah McFarlane, David French and Ron Bousso
LONDON/NEW YORK (Reuters) – BP (BP) is looking for buyers for a stake in its U.S. natural gas pipeline network, four people with knowledge of the matter said.
The British energy company could raise up to $3 billion from the sale, two of the people said, with one adding that BP may sell a 49% stake in the company.
The sale process is part of BP CEO Murray Auchincloss’s push to reduce the company’s debt levels, which have risen over the past year, two more people said.
BP declined to comment. All four people spoke on condition of anonymity as they were not authorized to speak publicly.
With its share price languishing, BP is facing pressure from investors to improve performance and profitability amid concerns about the company’s energy transition strategy.
It plans to sell stakes in Lightsource BP’s solar business, as well as its US onshore wind division and offshore wind operations. Auchincloss, which is looking to increase cash flow and reduce debt, will update the company’s strategy in February.
Net debt rose to $24.3 billion at the end of September, from $22.3 billion a year earlier, due to lower-than-expected asset sales, BP said in its third-quarter results.
The company’s shares have lost more than 18% of their value so far this year, underperforming any of its rivals. Shell shares are down 3% this year, while ExxonMobil is up 14% and Chevron is up almost 7%.
The U.S. oil and gas pipeline sector has undergone increasing consolidation in recent years as production grows and permitting issues for new pipelines make existing assets more valuable.
According to its website, BP owns approximately 1,500 miles (2,414 kilometers) of pipelines that transport 1.1 million barrels of crude oil, natural gas and fuels across the United States every day.
(Reporting by Sarah McFarlane, David French and Ron Bousso. Editing by Anousha Sakoui, Kirsten Donovan)
