Equinor UK, a subsidiary of Equinor and Shell UK, a subsidiary of Shell, have agreed to combine their UK offshore oil and gas assets to form a new company which will be the UK North Sea’s biggest independent producer.
The incorporated joint venture (IJV) will be set up to sustain domestic oil and gas production and security of energy supply in the UK.
On deal completion, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%), two leading global energy companies with decades of experience operating in the UK North Sea.
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.
The new company will invest to provide a long-term future for the individual oil and gas fields and platforms, helping extend the life of this crucial sector for the benefit of the UK.
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.
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 the hydrogen, carbon capture and storage, power generation, battery storage and gas storage assets.
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.
A range of exploration licenses will also be part of the transaction, the companies said.
Following completion, the new company will be self-funded.
“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 decarbonisation.
“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.
“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 providing the heat for millions of UK homes, the power for industry and the secure supply of fuels people rely on,” added Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director,
The transaction has economic effect on January 1, 2025. Completion of the transaction remains subject to approvals and is expected by the end of 2025.