In separate statements revealed on their respective web sites on Thursday, Equinor and Shell introduced that Equinor UK Ltd, a subsidiary of Equinor ASA, and Shell U.Ok. Restricted, a subsidiary of Shell plc will “mix their UK offshore oil and fuel property and experience to kind a brand new firm”.
That firm would be the UK North Sea’s largest impartial producer, the statements highlighted, including that the integrated three way partnership (IJV) “shall be set as much as maintain home oil and fuel manufacturing and safety of power provide within the UK”.
On deal completion, the brand new impartial producer shall be collectively owned by Equinor (50 %) and Shell (50 %), the statements famous. Equinor at the moment produces round 38,000 barrels of oil equal per day and Shell UK produces over 100,000 barrels of oil equal per day, within the UK, the statements identified. The brand new IJV is predicted to supply over 140,000 barrels of oil equal per day in 2025, the statements mentioned.
- Advertisement -
Following completion, the brand new firm shall be self-funded, Equinor’s possession stake shall be fairness accounted, and no natural capital expenditures associated to this funding shall be reported by Equinor, Equinor famous in its assertion, including that this transaction allows Equinor to learn from elevated short-term manufacturing and money circulation.
“The extra balanced possession construction of the property additionally contributes to decreased general threat publicity,” the corporate mentioned in its assertion.
Equinor employs round 300 folks in oil and fuel roles within the UK, whereas Shell employs roughly 1,000 in comparable oil and fuel positions throughout the nation, the statements identified. Rigzone requested Shell and Equinor what the mix will imply for these roles.
“We don’t anticipate any workers reductions as a direct results of this announcement,” a Shell spokesperson informed Rigzone.
“Nevertheless, there are a variety of ongoing reorganizations which have already been introduced and these are persevering with. We anticipate solely restricted extra job reductions forward of this transaction,” the spokesperson added.
An Equinor spokesperson informed Rigzone, “Equinor is just not planning any down-manning as a part of this transaction”.
“All workers engaged on UKCS actions for us are in scope for switch to the brand new firm,” the spokesperson added.
The three way partnership will embrace Equinor’s fairness pursuits in Mariner, Rosebank, and Buzzard, and Shell’s fairness pursuits in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion, the statements revealed, including that “a variety of exploration licenses can even be a part of the transaction”.
Equinor will retain possession of its cross-border property, Utgard, Barnacle, and Statfjord, and offshore wind portfolio together with Sheringham Shoal, Dudgeon, Hywind Scotland, and Dogger Financial institution, in response to the statements, which highlighted that it’s going to additionally retain the hydrogen, carbon seize and storage, energy technology, battery storage, and fuel storage property.
Shell UK will retain possession of its pursuits within the Fife NGL plant, St Fergus Fuel Terminal, and floating wind tasks beneath improvement – MarramWind and CampionWind, in response to the statements. The corporate can even stay Technical Developer of the Acorn carbon seize and storage venture, the statements revealed.
Completion of the transaction stays topic to approvals and is predicted by the top of 2025, the statements famous.
“With the as soon as prolific basin now maturing and manufacturing naturally declining, the mix of portfolios and experience will enable continued financial restoration of this important UK useful resource,” the statements mentioned.
“The brand new firm shall be extra agile, centered, cost-competitive, and strategically effectively positioned to maximise the worth of its mixed portfolios on the UK Continental Shelf,” they added.
“The brand new firm will make investments to supply a long-term sustainable future for particular person oil and fuel fields and platforms, serving to lengthen the lifetime of this significant sector for the good thing about the UK,” they continued.
“Each Shell and Equinor are proud to proceed the event of the North Sea as investing companions quite than particular person operators, opening a brand new chapter during which they’ll stay vital gamers within the UK power sector,” they went on to state.
Equinor’s Govt Vice President for Exploration and Manufacturing Worldwide, Philippe Mathieu, mentioned within the statements, “Equinor has been a dependable power accomplice to the UK for over 40 years, offering oil and fuel, growing the offshore wind trade, and advancing decarbonization”.
“This transaction strengthens Equinor’s near-term money circulation, and by combining Equinor’s and Shell’s long-standing experience and aggressive property, this new entity will play an important function in securing the UK’s power provide,” he added.
Shell plc’s Built-in Fuel and Upstream Director, Zoë Yujnovich, mentioned within the statements, “domestically produced oil and fuel is predicted to have a major function to play in the way forward for the UK’s power system”.
“To attain this in an already mature basin, we’re combining forces with Equinor, a accomplice of a few years,” Yujnovich added.
“The brand new enterprise will assist play a important function in a balanced power transition offering the warmth for tens of millions of UK properties, the facility for trade, and the safe provide of fuels folks depend on,” the Shell consultant continued.
Commenting on the mix, David Whitehouse, the CEO of trade physique Offshore Energies UK, mentioned in an announcement despatched to Rigzone that “this new firm will play a serious function in securing the UK’s homegrown power future”.
“To stay globally aggressive this trade is altering so the UK can take advantage of of the North Sea, its world class provide chains, and the alternatives of a homegrown power future,” he added.
“The North Sea is a nationwide financial asset and as we transfer to web zero the federal government says we want oil and fuel for many years to return. As we broaden our power combine, with offshore wind, hydrogen and carbon seize tasks, it stays important that companies are backed to speculate right here with long run, steady coverage,” Whitehouse went on to say.
To contact the writer, e mail andreas.exarheas@rigzone.com
