BP is still considering a sale of all or part of its UK upstream portfolio, which could fetch around £2 billion ($2.7 billion), though talks of a sale to Ithaca Energy fell through earlier this month, according to reports by Bloomberg and the Financial Times. We think the information is credible. A sale would fit the group’s strategic direction, and the company is an outlier in the UK, where other majors have either sold down or formed joint ventures. At the same time, BP has been pushing aggressively on the exploration front since its strategy reset in early 2025 – with activity in the US, Brazil and elsewhere filling the UK major’s hopper in the years ahead.

Rystad Energy views both moves as consistent pillars of the same strategic bet as the company shifts attention to regions with greater growth potential than the UK, where no exploration wells were drilled last year for the first time since 1964. To reduce its UK exposure, the company could also opt to form a pure-play joint venture rather than pursue an outright sale – a structure that would preserve production optionality while still delivering consolidation benefits.

The case for selling the UK upstream portfolio

A UK sale would help BP reach its $20 billion divestment target by the end of 2027. The company sold off assets worth $5.3 billion in 2025 and guides another $9–10 billion in 2026. Although BP’s first-quarter 2026 net income more than doubled quarter-on-quarter to $3.2 billion, net debt jumped 14% to $25.3 billion.

BP is the only remaining major among the top 10 UK producers, making the company a notable outlier as NEO NEXT+ and Adura, both pure-play joint ventures part-owned by majors, now rank first and second by production. BP’s sale last year of its 32% stake in Culzean, the largest UK gas field by production at around 75,000 barrels of oil equivalent per day (boepd), indicates that the company may be willing to sell the entire portfolio. We estimate the production impact at around 60,000 boepd if the portfolio is sold, against BP’s 2030 output target of 2.3–2.5 million boepd.

We value BP’s UK upstream portfolio at $3.4 billion unrisked. Good candidates to acquire it include NEO NEXT+ and Adura after the talks with Ithaca Energy fell through.

Filling the exploration hopper elsewhere

Exploration efforts since BP’s 2025 strategic pivot back to upstream oil and gas activity are already bearing fruit – notably the giant Bumerangue discovery in Brazil, estimated to hold 8 billion barrels of liquids in place and the single largest discovery globally in 2025. Since 2025, the company has discovered about 2.7 billion boe in recoverable resources net to BP, according to Rystad Energy estimates.

Net exploration and appraisal drilling nearly doubled last year compared to 2023–2024, and Rystad Energy expects these levels to be sustained through 2027. New CEO Meg O’Neill has set a target to raise BP’s reserve replacement ratio (RRR) to 100% by 2027, from around 76% currently.

We expect BP to increase its exploration efforts this year and next, with campaigns in countries including Egypt, Brazil, Angola and the US leading the way. Wells will be a mix of frontier drilling, appraisal activity and infrastructure-led exploration (ILX) targets – a strategy that will enable the major to focus on resources with quick timelines to production while including the frontier exploration that historically has resulted in large finds.

In Brazil, the company is firming up a three-well appraisal of Bumerangue and a wildcat on the Tupinamba block. Beyond Bumerangue, standout finds include the Algaita and Gajajeira discoveries in Angola, made by Azule Energy – BP’s joint venture with Eni – as well as the Volans and Capricornus discoveries in Namibia, and the Denise West field in Egypt, with the latter estimated to hold about 250 million boe of recoverable resources.

As the company embarks on a more aggressive exploration path, BP has also shifted its approach to acreage acquisition: having not farmed into any significant exploration acreage between 2019 and 2025, it recently acquired three blocks in Namibia’s Walvis Basin, signed a prospecting permit in Algeria’s Eastern Basin, and acquired 40% interests in six exploration blocks in Uzbekistan.

Authors:

Matt Cooper
Senior Vice President, Analysis
matt.cooper@rystadenergy.com

Pranav Joshi
Vice President, Analysis
pranav.joshi@rystadenergy.com

This article draws on insights from our latest commentaries, "Report of BP considering UK divestment seems credible" and "BP puts its focus on filling the exploration hopper". The full analysis is available to clients via the Client Portal.