The deal unlocks significant capital for BP while its US onshore business, bpx energy, retains full operatorship and control over the strategic assets.
BP has struck a deal with funds managed by private investor Sixth Street to divest non-controlling interests in the Permian and Eagle Ford midstream assets of its US onshore oil and gas business, bpx energy, for a total consideration of $1.5 billion.
The total $1.5 billion consideration is structured in two tranches. Approximately $1 billion is to be paid upon signing, with the remaining balance expected to be completed by the end of the year, pending all necessary regulatory approvals.
The midstream assets involved are integral to bpx's US onshore operations, encompassing essential pipelines and facilities in the prolific Eagle Ford and Permian basins. These include four major Permian central processing facilities, namely Grand Slam, Bingo, Checkmate, and Crossroads. These facilities are vital to the logistics chain, connecting wells to third-party pipeline systems to transport oil and gas efficiently to customers.
Despite the change in ownership structure, bpx energy will remain the operator of all the assets, maintaining full control over all operational decisions and maintenance. This is a key element of the deal, ensuring continuity of service and allowing bpx to continue executing its strategic vision for the basins.
Following the completion of both transaction phases, bpx energy’s ownership stakes will be adjusted as follows:
• Permian Midstream Assets: Ownership interest will move to 51% (down from 100%).
• Eagle Ford Midstream Assets: Ownership interest will move to 25% (down from 75%).
Sixth Street will hold the remaining non-operating interests in the assets. The transaction is expected to increase non-controlling interest on BP's balance sheet, with a projected effect on the income statement's non-controlling interest in the range of $100 million to $200 million per annum.
The capital generated from the partial sale provides a material contribution toward BP's financial goals. The company, which announced a reset of its strategy at its Capital Markets Update in February 2025, is focused on generating higher returns and strengthening its balance sheet. This deal is a significant step toward achieving the firm's $20 billion divestment target by 2027.
Kyle Koontz, CEO of bpx energy, emphasized the strategic nature of the initial midstream investment and the value of the partnership. "We recognized early on that investing in midstream would be an important ingredient to our success in these basins in terms of driving value, flow assurance, and lowering emissions," Koontz stated. "This transaction reinforces that we are on track to maximize the return on our investment in these basins and allows us to continue operating them safely and efficiently.”
