Shell (LSE: SHEL) and Equinor (OSE: EQNR) have announced plans to combine their North Sea oil and gas assets into a new company, set to become one of the largest producers in the region. The joint venture will be based in Aberdeen.
The 50-50 partnership will incorporate Equinor’s holdings in Mariner, Rosebank, and Buzzard fields, alongside Shell’s interests in Shearwater, Penguins, Jackdaw, and other fields. The combined company is expected to produce over 140,000 barrels of oil equivalent per day by 2025.
The transaction, effective from 1 January 2025, is subject to regulatory approvals and expected to close by the end of the year. Shell and Equinor’s UK-based oil and gas workforce of 1,300 employees will transition to the new entity.
Shell, headquartered in London, is one of the world’s largest energy companies, known for its extensive oil and gas operations and growing investments in renewable energy.
Equinor, formerly known as Statoil, is a Norwegian state-owned multinational energy company headquartered in Stavanger. Established in 1972 as the Norwegian State Oil Company (Statoil), it was created to manage the country’s burgeoning oil resources following significant offshore discoveries in the late 1960s.
Strategic and economic rationale
The venture allows Shell and Equinor to leverage fiscal synergies and offset losses amid a challenging regulatory landscape. Recent windfall taxes and the decline of North Sea production have spurred consolidation efforts among energy majors. Analysts suggest the deal aligns with similar collaborations in Norway and other mature basins.
Shell’s Integrated Gas and Upstream Director, Zoë Yujnovich, stated: “This new venture will play a critical role in a balanced energy transition, providing heat for millions of UK homes and secure fuel supplies.”
Equinor’s Executive Vice President for Exploration and Production International, Philippe Mathieu, highlighted the benefits of combining expertise: “This transaction strengthens Equinor’s near-term cash flow and secures a reliable energy supply for the UK.”
Environmental groups, including Greenpeace, have expressed concerns over projects like Rosebank and Jackdaw due to their emissions impact, but the companies maintain that the venture supports the UK’s energy needs during the transition to renewables.