Shell and Equinor Form New Joint Venture in the UK North Sea

Investing.com — Shell and Equinor announced plans to establish a new independent oil and gas producer in the UK North Sea, combining their assets and expertise in the region.

Joint Ownership

The joint venture will be equally owned by both companies, with each holding a 50% stake. Once operational, it will become the largest independent oil and gas company in the UK.

Regulatory Approvals

The transaction is subject to regulatory approvals and is expected to be completed by the end of 2025.

Addressing Challenges

The venture aims to tackle the challenges of operating in the maturing North Sea basin, where declining production levels have raised questions about the region's future. By pooling resources and technical know-how, Shell (LON:SHEL) and Equinor aim to sustain oil and gas output while extending the economic life of fields and platforms.

Headquartered in Aberdeen

The company will be headquartered in Aberdeen, a longstanding center of the UK’s offshore energy industry.

Asset Portfolio

The new company's portfolio will include a diverse range of assets. Equinor will contribute interests in fields such as Mariner, Rosebank, and Buzzard, while Shell will include its stakes in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion. Additionally, several exploration licenses will be transferred to the joint venture.

Supporting Energy Transition

In a statement, Shell emphasized the importance of domestically produced oil and gas for the UK’s energy system moving forward.

“To achieve this in an already mature basin, we are combining forces with Equinor, a partner of many years,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director. She noted that the new company will support the energy transition by ensuring a secure supply of fuels for UK homes and industries.

Strengthening Cash Flow

“This transaction strengthens Equinor’s near-term cash flow,” remarked Philippe Mathieu, Equinor’s Executive Vice President for Exploration and Production International. He added that the combined expertise and resources of the two companies will play a “crucial role” in maintaining the country’s energy supply.