Shell and Equinor to create the UK’s largest independent oil and gas company

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

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

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

The venture aims to address the challenges of operating in the maturing North Sea basin, where declining production levels have raised questions about the future of the region. 

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. 

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

The portfolio of the new company will include a wide range of assets. Equinor will contribute its 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, a number of exploration licenses will be transferred to the joint venture as part of the deal.

In a statement, Shell said that the role that domestically produced oil and gas will play in 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 added that the new company will support the energy transition by ensuring a secure supply of fuels for UK homes and industries.

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

Source: Investing.com