According to persons familiar with the situation, BP Plc is considering selling a 49% share in its U.S. oil and gas pipeline network in the Gulf of Mexico in an effort to earn up to $1 billion.

The proposed divestiture would aid BP in achieving its goals to cut debt and preserve its dividend. BP’s net debt was $23.7 billion, despite the fact that it increased its shareholder payout by 10% in the second quarter’s earnings in August.

According to the sources, BP has transferred its interests in U.S. Gulf of Mexico pipelines to a new business, of which it will own 51% and sell the remainder.

According to the sources, the pipelines firm generates about $200 million in earnings before interest, taxes, depreciation, and amortisation over a 12-month period.

No settlement is guaranteed, the sources warned, and they asked for anonymity because the situation is private. BP opted against commenting.

According to its website, BP, one of the biggest oil and natural gas producers in the U.S. Gulf of Mexico, expects to generate about 400,000 barrels of oil equivalent per day from the area by the middle of this decade. It has five offshore platforms, with Argos, the fifth, starting up in April.

According to its website, BP owns stakes in a number of pipelines, including the 115-mile Cleopatra Gas Pipeline, the 89-mile Endymion Oil Pipeline, and the 161-mile Mars Oil Pipeline.

This would not be the first time that BP has sold an interest in U.S. assets. The company is now conducting a leadership search following the resignation of former Chief Executive Bernard Looney last month due to undeclared personal relationships with employees.

It established a partnership in 2021 for infrastructure conveying refined products, and for about $700 million, investment firm Sixth Street Partners bought a 49% stake in it. According to Bloomberg News, Sixth Street made a $400 million further investment last month.

(Adapted from MoringStar.com)