Equinor and Shell have announced that they will combine their North Sea oil and gas assets to create a new company.
When the deal is signed off Equinor UK will control 50% of the new firm and Shell UK will hold the remaining 50% stake - creating what will be the UK's largest independent producer employing 1,300 people.
The company will be based in Aberdeen and will be set up to sustain domestic oil and gas production and the security of energy supply in Britain, Equinor said.
The firm will take over stakes of Equinor’s Mariner, Rosebank and Buzzard fields and Shell’s Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair and Schiehallion.
Equinor confirmed that “a range of exploration licenses will also be part of the transaction".
Equinor’s executive vice president for exploration and production international, Philippe Mathieu, said: “Equinor has been a reliable energy partner to the UK for over 40 years, providing oil and gas, developing the offshore wind industry, and advancing decarbonisation.
“This transaction strengthens Equinor’s near-term cash flow, and by combining Equinor’s and Shell’s long-standing expertise and competitive assets, this new entity will play a crucial role in securing the UK’s energy supply.”
Shell’s integrated gas and upstream director, Zoë Yujnovich, added: “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.”
The new company is expected to produce over 140,000 barrels of oil equivalent per day in 2025.
Equinor has said it will retain ownership of its cross-border assets, Utgard, Barnacle and Statfjord and offshore wind portfolio including Sheringham Shoal, Dudgeon, Hywind Scotland and Dogger Bank. It will also retain the hydrogen, carbon capture and storage, power generation, battery storage and gas storage assets.
Meanwhile, Shell will retain ownership of its interests in the Fife NGL plant, St Fergus Gas Terminal and floating wind projects under development - MarramWind and CampionWind.
Shell will also remain technical developer of Acorn, Scotland’s largest carbon capture and storage project.
The transaction has economic effect on January 1 2025. Completion of the transaction remains subject to approvals and is expected by the end of 2025.