Shell and Equinor will combine their offshore oil and gas assets in the UK North Sea to form a new company with 1,300 employees.
The Aberdeen-based company will become the North Sea's largest independent producer and is expected to produce more than 140,000 barrels of oil equivalent (BOE) per day next year.
Shell said there would be no job losses as a result of the deal, adding it had the potential to “extend” the lifespan of oil and gas jobs in the UK.
Norway's Equinor employs about 300 people in oil and gas jobs in the UK, while Shell employs about 1,000 people in similar roles. Equinor said the 50-50 joint venture would create a more “cost-competitive” way to utilize the “once prolific basin.” [is] It will decrease naturally. ”
The merger includes Equinor's vast Rosebank oil field. The field is located 80 miles (130 km) northwest of the Shetland Islands and holds approximately 500 million barrels of oil and gas, making it the UK's largest undeveloped field. Climate change activists recently appealed to a Scottish court to cancel the license for Rosebank drilling, saying it would cause “substantial” and unjustified damage to the planet.
Shell will contribute nine areas to the venture, and Equinor will add three areas.
Shell's integrated gas and upstream director Zoe Yujinovich said “anyone who spends the majority of their time” with Shell and Equinor's North Sea assets, such as oil rigs, will move to the new company.
He added that the deal could create a “growing and more prosperous entity.”
“From an employee perspective, I think this really increases the diversity of career options, but I would also argue that it also increases career longevity under the new combined organization. .”
He said the new company would “maintain domestic oil and gas production and contribute to the UK's energy needs for decades to come”.
But he added that the North Sea is “no longer the rich basin it once was.”
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“Decades of continued production will naturally mean that there will be less oil and gas, and the maturation of the basin will inevitably mean that what is left will be more difficult to recover,” Yujinovic said.
“If North Sea production is to remain competitive with other global energy hubs, it is essential that we continue to adapt and be proactive to changing realities.”
The transaction is subject to regulatory approval and is expected to close by the end of 2025.
