Chevron to end 55-year North Sea presence with Clair field sale

CHEVRON has decided to market its 19.4% stake in the Clair field, one of the UK’s largest hydrocarbon resources, along with associated assets in the North Sea. The move will mark the energy major’s exit from the oil and gas producing region after more than 55 years.

The company said the decision to divest the stake in the field, which boasts an estimated 7bn bbls of oil, follows a regular global review to assess whether its assets are strategic and competitive for future capital.

Chevron said the process to market its stake in Clair may take months and may not result in a sale. But Reuters notes that a sale could raise up to US$1bn, excluding tax benefits.

The move comes as Chevron prepares for its US$53bn acquisition of oil and gas producer Hess. The purchase is currently held up by a legal battle with ExxonMobil over Hess’ 30% stake in the prolific Staebrock block.

Troubling political plays

The US oil and gas major has made previous moves to offload its North Sea assets, including agreeing in 2018 to sell its 40% operated interest in Rosebank to Equinor, and the bulk sale of ten fields to Ithaca Energy, announced in 2019.

Chevron stressed that its decision on Clair was not related to the UK’s political climate, concerns about the business performance and competitiveness of the UK basin, or announcements about the UK’s windfall tax.

Following the high energy prices triggered by Russia’s invasion of Ukraine in 2022, the UK introduced the energy profits levy after speculation of a windfall tax. Currently charged at 35%, it was announced in the UK’s 2024 spring budget that the tax would be extended to the end of March 2029. The Telegraph reports that Chevron’s decision came after chancellor of the exchequer Jeremy Hunt rejected industry pleas to scrap the tax.

Ahead of the next general election, the Labour party has proposed raising the tax to 38%, as part of plans that industry body Offshore Energies UK warned could wipe out 42,000 jobs and £26bn (US$33bn) in economic value.

Meanwhile, UK oil and gas production also faces political uncertainty as cross-party politicians apply pressure on government to bring an end to oil and gas licensing and refocus on climate efforts. Labour already plans to ban new licences for exploration in the North Sea, though this is facing union backlash.

Offshore Energies UK has said that new licensing is needed to manage the decline in North Sea production as fields move to decommissioning. Currently there are 283 operating oil and gas fields in the North Sea, and 180 will cease production by 2030.

Alongside Chevron, other majors have also rid themselves of holdings in the region including BP, ConocoPhillips, ExxonMobil, and Shell.