In a move expected to create the UK North Sea’s biggest independent producer, Equinor UK and Shell UK have agreed to combine their UK offshore oil and gas assets and expertise into one company.
With a 50/50 split stake between Equinor and Shell, the new joint venture will reportedly be more agile, focused, cost-competitive and strategically well positioned to maximise the value of the combined portfolio. According to Shell, the decision was made in light of the maturing nature of the basin, with production rates naturally declining. As a result, the new company will target the continued economic recovery of the resource and will invest to provide long-term sustainable future for individual oil and gas fields and platforms.
“Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system,” remarked Shell plc’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.”
Equinor’s Executive Vice President for Exploration and Production International, Philippe Mathieu, added, “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.”
In the UK, Shell currently produces around 100,000 barrels of oil equivalent per day with Equinor contributing an additional 38,000. With the new joint venture already expressing its desire to maintain rates, this could be a potentially game-changing development for the various well intervention service and equipment suppliers to the region.
