BP has agreed to sell its non-operated interest in the Bay du Nord offshore oil development to Equinor, marking another step in the UK energy major’s strategy to streamline its upstream portfolio and tighten capital allocation.

Financial terms of the transaction were not disclosed. The sale remains subject to customary regulatory approvals and closing conditions.

The divestment covers BP’s interests across 10 licenses associated with the Bay du Nord project in the Flemish Pass Basin, located around 500 kilometers offshore Newfoundland and Labrador. BP said its holdings represented an average working interest of 37.212%, while Equinor remains the project’s operator.

The move aligns with BP’s broader efforts to simplify its asset portfolio and concentrate investment on projects expected to generate stronger returns.

“We’re proud of our partnership with Equinor and the work we’ve done together to develop the Bay du Nord project,” Gordon Birrell, BP’s executive vice president for upstream, said in a statement. “However, BP is exercising strict capital discipline, allocating it to the opportunities that create the most value for BP.”

Bay du Nord is one of Canada’s largest planned offshore oil developments and received regulatory approval in 2022 after a lengthy environmental review. The project is expected to become the country’s first deepwater oil development, although its final investment decision has faced delays amid higher costs and changing market conditions.

Following the sale, BP said it will retain a 100% interest in two exploration licenses offshore Newfoundland and Labrador, designated EL 1166 and EL 1170.

The company added that any accounting impacts from the transaction will be disclosed with its second-quarter results.

By Charles Kennedy for Oilprice.com

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