Shell and Equinor combine UK North Sea assets

OIL AND GAS giants Shell and Equinor will combine their offshore assets in the UK North Sea to create what they expect will be “the largest independent oil and gas company” in the region.  

The 50-50 joint venture between the firms will boast a total production portfolio of more than 140,000 boe/d.

Production in the North Sea is going through a natural decline with reserves drying up.  Multinationals have been offloading their assets, with Shell recently announcing plans to sell 11 gas fields and one exploration prospect in the UK Southern North Sea to British independent operator, Viaro Energy.

The energy companies have not given up on the basin just yet, though, with Shell and Equinor vying to develop the Jackdaw and Rosebank oil fields, respectively. Rosebank is reported to be the largest new field undeveloped in the North Sea, expected to contain 500m barrels of oil and gas.

Exploratory pains

The merger will see Shell combine its 1,000-strong team in the UK with Equinor’s 300 workforce in similar oil and gas positions across the country.

Both firms are currently embroiled in a lengthy legal battle with environmental firms over their development of future oil fields.

Greenpeace and Uplift have launched legal challenges to Rosebank and Jackdaw at the Court of Sessions in Edinburgh. The organisations argue that the government unlawfully granted consent to the development of these oilfields as it only considered the emissions that would be released from drilling, and not the burning of oil and gas.

Shell have said that revoking now would only waste “huge sums of money and have a damaging impact on jobs”, reports the BBC. Rosebank alone is expected to create more than 2,000 jobs.

Securing the UK energy system

In the partnership, the companies will still have control over their respective oil fields and assets, which includes Equinor’s interests in Mariner, Rosebank, and Buzzard, and Shell’s interests in Shearwater, Gannet, Jackdaw, and Clair and Schiehallion.

Zoë Yujnovich, director of Shell’s integrated gas and upstream business, said: “Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system. 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.”