On Tuesday, independent British oil producer Viaro Energy said it would buy UK Southern North Sea assets owned by Shell (NYSE: SHEL) and Exxon Mobil (NYSE: XOM).
Reuters reported about the deal talks in May, citing sources and one of them had said the transaction could be valued at $500 million.
Viaro said it would assume full ownership of one of the largest and longest-producing gas asset portfolios in the UK Continental Shelf.
Pending regulatory approval, Viaro would acquire a portfolio comprising 11 operated offshore assets and one exploration field, all tying back to the Shell-operated onshore Bacton Gas Processing Terminal via Leman and Clipper fields.
The Bacton Terminal provides a direct route for natural gas produced from the Southern and Central North Sea to the UK National Transmission system, operated by the National Grid, enabling gas to flow between the UK and the Netherlands.
In 2023, the assets produced around 28,000 barrels of oil equivalent per day (boepd), about 5% of the UK’s total gas production, Viaro added.
With this deal, Exxon Mobil (NYSE: XOM) would complete its exit from the North Sea region, where it was present since 1964.
The company expects to close the transaction in 2025, subject to approval, an Exxon spokesperson said, adding that the deal’s terms are confidential.
The U.S. oil major sold most of its assets in the central and northern North Sea to Neo Energy in 2021 and its rival Chevron (NYSE: CVX) is also in the selling process its last remaining assets in the aging basin.
The exit is the latest step in a steady retreat of top energy companies from the declining British basin which pioneered deepwater production in the 1970s, as they focus on newer assets globally.
The deal also follows Shell’s review of its portfolio in the U.K. Southern North Sea in 2021 where it aimed to focus on areas where it has competitive advantages, the British oil major said in a separate statement.
Given the importance of gas to the U.K.’s energy security, Shell has also taken investment decisions on the Jackdaw and Victory gas fields, to sustain domestic gas production, it said.
Shell (NYSE: SHEL) remains one of the main producers in the North Sea, operating several fields including the Penguins redevelopment, and holding a stake in the BP-operated Clair field.
(Source: ReutersReuters)
