Shell and Equinor will merge their oil and gas assets in Britain in a 50/50 joint venture which will be the largest independent oil and gas producer in the UK North Sea, the oil majors said on Thursday.
The companies have agreed that Equinor UK Ltd and Shell U.K. Limited are to combine their UK offshore oil and gas assets and expertise to form an incorporated joint venture (IJV), to “sustain domestic oil and gas production and security of energy supply in the UK,” two of Europe’s biggest oil companies said in a joint statement.
“With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital UK resource,” they said.
The new company will invest to provide a long-term sustainable future for individual oil and gas fields and platforms. Based in Aberdeen, the joint venture will include Equinor’s equity interests in the Mariner, Rosebank, and Buzzard fields and Shell’s equity interests in the Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion fields.
A range of exploration licenses will also be part of the transaction, which remains subject to approvals and is expected to close by the end of 2025.
While merging other assets, Equinor will retain ownership of its UK-Norway cross-border assets, Utgard, Barnacle, and Statfjord, as well as its offshore wind portfolio including Sheringham Shoal, Dudgeon, Hywind Scotland, and Dogger Bank. It will also retain the hydrogen, carbon capture and storage (CCS), power generation, battery storage, and gas storage assets.
Shell UK, for its part, will retain ownership of its interests in the Fife NGL plant, the St Fergus Gas Terminal, and the MarramWind and CampionWind floating wind projects under development. Shell UK will also remain Technical Developer of Acorn, Scotland’s largest carbon capture and storage project.
Shell and Equinor are currently defending in court their plans to develop the planned Jackdaw and Rosebank oil and gas projects, respectively, after environmentalists won landmark court battles earlier this year and the Labour government dropped its right to challenge judicial reviews brought against the development consents for the fields.
By Tsvetana Paraskova for Oilprice.com
