Shell and Equinor have announced plans to merge their oil and gas assets in the UK through a 50/50 joint venture. The new partnership, expected to become the largest independent oil and gas producer in the UK North Sea, was revealed in a joint statement on Thursday.
The two energy giants will combine their UK offshore oil and gas operations, creating an incorporated joint venture (IJV) aimed at maintaining the UK’s domestic oil and gas production and energy security. The joint venture will leverage the expertise and resources of both companies to address the challenges posed by the maturing North Sea basin and the natural decline in production.
“The combination of portfolios and expertise will enable continued economic recovery of this important UK resource,” said the companies in their statement. They also noted that the new venture would focus on ensuring the long-term sustainability of individual oil and gas fields and platforms.
Headquartered in Aberdeen, the new company will include Equinor’s stakes in key fields such as Mariner, Rosebank, and Buzzard, alongside Shell’s interests in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion. The venture will also encompass various exploration licenses.
The deal is still subject to regulatory approvals and is expected to close by the end of 2025.
While merging their assets in the UK, Equinor will retain ownership of its cross-border UK-Norway assets, including Utgard, Barnacle, and Statfjord. The company will also keep its offshore wind portfolio, which includes projects such as Sheringham Shoal, Dudgeon, Hywind Scotland, and Dogger Bank. Additionally, Equinor will maintain its hydrogen, carbon capture and storage (CCS), power generation, battery storage, and gas storage assets.
Shell, for its part, will continue to own its stake in the Fife NGL plant, the St Fergus Gas Terminal, and the MarramWind and CampionWind floating wind projects. The company will also remain the technical developer of Acorn, Scotland’s largest CCS project.
The announcement comes as both companies face legal challenges. Shell and Equinor are currently defending their plans to develop the Jackdaw and Rosebank oil fields in court, after environmental groups successfully won judicial reviews earlier this year. The UK government has decided not to challenge these legal battles, allowing the courts to decide the future of these projects.
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