The Melbourne daily today said BHP was declining to comment, despite widespread reports in the British media about the proposed sale.

The newspaper said mature UK oil and gas assets now faced a less attractive tax regime, with the British Blair government doublng supplementary tax, on top of standard corporate tax, from 10% to 20%.

BHP’s British assets are a 16% stake in the Bruce field and a 32% interest in the nearby Keith field. In the March quarter, they accounted for 1.9% of BHP's total oil output and 8.3% of its gas production.

The Bruce field – which in 1993 was rated a 200 millon barrel oil field, plus 3 tcf of natural gas - is 340km north-east of Aberdeen. The smaller Keith field produced its first oil in 2000.