Equinor, Shell Form Largest North Sea Oil And Gas Producer
Joint Venture Will Allow Continued Recovery Of The Maturing North Sea Basin
Equinor UK Ltd., a subsidiary of Equinor ASA, and Shell UK Ltd., a subsidiary of Shell plc, are combining their UK offshore oil and gas assets and expertise to form a new company which will be the UK North Sea’s biggest independent producer. Each company will have a 50% stake in the incorporated joint venture (IJV), which will be set up to sustain domestic oil and gas production and security of energy supply in the UK. With the once prolific basin now maturing and production naturally declining, the IJV will allow continued economic recovery of UK resources. According to Equinor and Shell, the new company will be more agile, focused, cost-competitive and strategically well positioned to maximize the value of its combined portfolios on the UK Continental Shelf. IJV will invest to provide a long-term future for the individual oil and gas fields and platforms. Based in Aberdeen, the joint venture 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. A range of exploration licenses will also be part of the transaction.
“Equinor has been a reliable energy partner to the UK for over 40 years, providing oil and gas, developing the offshore wind industry, and advancing decarbonization,” said Equinor’s executive vice president for exploration and production international, Philippe Mathieu. “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.”
In the UK, Equinor currently produces approximately 38,000 barrels of oil equivalent per day (boe/d). Shell UK produces over 100,000 boe/d. The new company is expected to produce over 140,000 boe/d in 2025. Equinor employs around 300 people in oil and gas roles in the UK, while Shell employs approximately 1000 in similar oil and gas positions across the country.
“Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system,” said Shell’s integrated gas and upstream director, Zoë Yujnovich. “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 providing the heat for millions of UK homes, the power for industry and the secure supply of fuels people rely on.”
The transaction has economic effect on 1st January 2025. Completion of the transaction remains subject to approvals and is expected by the end of 2025.
