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Shell and Equinor form largest UK North Sea oil and gas joint venture
11/12/2024
News
Oil major Shell and Norway’s Equinor have announced plans to merge their UK North Sea assets to form the ageing basin’s largest oil and gas company.
The 50:50 joint venture will be based in Aberdeen and pool the companies’ resources to cut costs and boost profitability. The jv will include Equinor’s equity interests in Mariner, Rosebank and Buzzard, and Shell’s equity interests in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair and Schiehallion, along with a range of exploration licences.
According to Reuters, Equinor will bring large tax savings while Shell’s larger oil and gas production offers the venture higher cashflow as it develops new fields, including the new giant Rosebank oilfield project.
The new jv will be the UK North Sea’s biggest independent producer. The transaction is effective from 1 January 2025 and is expected to produce around 140 b/d of oil equivalent next year.
Shell’s Integrated Gas and Upstream Director Zoë Yujnovich commented: ‘Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system. To achieve this in an already mature basin, we are combining forces with Equinor, a partner of many years. The new venture will help play a critical role in a balanced energy transition ....’
Philippe Mathieu, Equinor’s Executive Vice President for Exploration and production International, was also enthusiastic about the new deal. ‘Equinor has been a reliable energy partner to the UK for over 40 years … This transaction strengthens Equinor’s near-term cash flow, and by combining Equinor’s and Shell’s long-standing expertise and competitive assets, this new entity will play a crucial role in securing the UK’s energy supply,’ he said.
However, Equinor will retain its interest in its offshore wind portfolio, which includes Sheringham Shoal, Dudgeon, Hywind Scotland and Dogger Bank, and will maintain ownership of its cross-border oil and gas assets in the Norwegian North Sea of Utgard, Barnacle and Statfjord.
