The incorporated joint venture (IJV) will be set up to sustain domestic oil and gas production and the security of energy supply in the UK.
On deal completion, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%), two leading global energy companies with decades of experience operating in the UK North Sea. With the once prolific basin now maturing and production naturally declining, the combination of portfolios and expertise will allow continued economic recovery of this vital UK resource. The new company will be more agile, focused, cost-competitive, and strategically well-positioned to maximize the value of its combined portfolios on the UK Continental Shelf.
The new company will invest to provide a long-term future for the individual oil and gas fields and platforms, helping extend the life of this crucial sector for the benefit of the UK. Based in Aberdeen, the heart of the nation’s energy sector, the joint venture will include Equinor’s equity interests in Mariner, Rosebank, and Buzzard, and Shell’s equity interests in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion. A range of exploration licenses will also be part of the transaction.
Both Equinor and Shell are proud to continue the development of the North Sea as investing partners rather than individual operators, opening a new chapter in which they will remain significant players in the UK energy sector.
Following completion, the new company will be self-funded, Equinor’s ownership stake will be equity accounted for, and Equinor will report no organic capital expenditures related to this investment. This transaction enables Equinor to benefit from increased short-term production and cash flow. The more balanced ownership structure of the assets also contributes to reduced overall risk exposure.
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 decarbonization. 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, commented: “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 transaction has an economic effect on January 1, 2025. Completion of the transaction remains subject to approvals and is expected by the end of 2025.
