Shell and Equinor have partnered to combine their UK offshore oil and gas assets and expertise to form a new company, aimed to be the UK North Sea’s biggest independent producer.
On deal completion expected by the end of 2025, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%).
The incorporated joint venture (IJV) will be set up to sustain domestic oil and gas production and security of energy supply in the UK, said Shell on Thursday.
“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,” said Shell plc’s Integrated Gas and Upstream Director, Zoë Yujnovich.
“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 relies on,” Yujnovich added.
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, the energy giant said.
Based in Aberdeen, the heart of the nation’s energy sector, 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. 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,” said Philippe Mathieu, Equinor’s Executive Vice President for Exploration and Production International.
In the UK, Equinor currently produces about 38,000 barrels of oil equivalent per day (boe/d). While Shell UK produces over 100,000 boe/d. The new IJV is expected to produce over 140,000 boe/d in 2025.
Equinor will retain ownership of its cross-border assets, Utgard, Barnacle and Statfjord and offshore wind portfolio including Sheringham Shoal, Dudgeon, Hywind Scotland and Dogger Bank. It will also retain hydrogen, carbon capture and storage, power generation, battery storage and gas storage assets.
Meanwhile, Shell UK will retain ownership of its interests in the Fife NGL plant, St Fergus Gas Terminal and floating wind projects under development – MarramWind and CampionWind. Shell UK will also remain Technical Developer of Acorn, Scotland’s largest carbon capture and storage project.
