Equinor and Shell have announced plans to establish a joint venture to "sustain domestic oil and gas production and security of energy supply in the UK."
In separate releases, the companies said the new operating entity, which has yet to be named, will become the UK's largest independent oil and gas producer. The venture will be owned equally by Equinor and Shell and will consolidate their UK Continental Shelf (UKCS) assets to enhance cost efficiencies.
The Aberdeen-based joint venture will assume ownership of Equinor's equity stakes in the Mariner, Rosebank, and Buzzard fields, alongside Shell’s interests in the Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion fields.
“Domestically produced oil and gas is expected to have a significant role to play in the future of the UK’s energy system. To achieve this in an already mature basin, we are combining forces with Equinor, a partner of many years,” said Zoë Yujnovich, the integrated gas and upstream director for Shell.
Philippe Mathieu, Equinor’s executive vice president for international exploration and production, added that the deal will improve 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.”
Certain projects are excluded from the deal. Equinor will retain its cross-border assets, as well as its offshore wind, hydrogen, and carbon storage projects in the UK. Shell will continue to own its onshore gas facilities and its wind and carbon storage businesses. Exploration licenses currently held by both companies will transfer to the joint venture upon deal completion.
Moving forward, Equinor and Shell said they will continue their involvement in the UKCS through nonoperating investments rather than as individual operators. Equinor described this transition in its announcement as a “new chapter” for both companies, emphasizing their commitment to remaining key players in the UK market.
Pending regulatory approvals, the new operating company is expected to be established by the end of next year. Once operational, the financial terms of the deal will be retroactive to an effective date of 1 January 2025.
