Shell and Equinor announce joint venture company in North Sea

OIL AND gas giants Shell and Equinor are to combine their North Sea assets and form a new company.

They announced the joint venture this morning (Thursday), which will be split 50-50, with Shell saying the move would help sustain domestic oil and gas production.

Shell said oil and gas production was “naturally declining”, and that the combination of their North Sea assets would “allow continued economic recovery of this vital UK resource”.

“The new company will invest to provide a long-term sustainable future for individual oil and gas fields and platforms, helping extend the life of this crucial sector for the benefit of the UK,” Shell said.

The joint venture will be based in Aberdeen, and is subject to regulatory approval – which Shell estimates will be provided late next year.

Equinor is involved in fields such as Rosebank, which it has 80 per cent ownership of, while Shell holds a stake in the Clair and Schiehallion fields.

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No job losses are expected as a result of the joint venture.

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.

“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: “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.”

However Uplift UK – which supports a fair and rapid transition away from oil and gas production – was critical of the move.

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Its executive director Tessa Khan said the North Sea was in decline and it was now “eye-wateringly expensive” to get the remaining oil out of the basin.

“While North Sea drilling is making less and less commercial sense for companies like Shell and Equinor, it’s an even worse deal for the UK public,” she added.

“The government needs to be clear eyed about what is happening in the North Sea.

“Jobs supported by the industry have more than halved in the past decade as reserves decline, yet most oil and gas companies invest nothing in renewables.

“Shell and Equinor might want to extract as much profit as they can from what’s left in the basin, but the UK’s energy workers need the government to manage the transition to clean energy and not leave it to a diminishing number of profiteering oil companies.”