Shell and Norway’s Equinor have announced plans to merge their British offshore oil and gas assets into a joint venture.
The new company, based in Aberdeen, Scotland, aims to maintain fossil fuel production and ensure the security of energy supply in the U.K.
The deal is expected to be completed by the end of next year, pending approval, according to CNBC.
Upon completion, the new company will become the largest independent producer in the U.K. North Sea, Shell stated.
The company is projected to produce more than 140,000 barrels of oil equivalent per day in 2025.
Early Thurs, Shell’s shares dropped by 0.8%, while Equinor’s stock rose by 0.3%.
“Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system,” Zoë Yujnovich, integrated gas and upstream director at Shell, said in a statement.
“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,” Yujnovich added.
The joint venture will include Equinor’s equity stakes in Mariner, Rosebank, and Buzzard, along with Shell’s holdings in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion.
Equinor currently employs around 300 people in the U.K., while Shell has a workforce of about 1,000 people in oil and gas roles across the country.
“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,” Philippe Mathieu, executive vice president for exploration and production international at Equinor, said in a statement.
