Addressing the announcement of Equinor and Shell combining UK offshore oil and gas assets in a newly incorporated joint venture, Gail Anderson, Research Director at Wood Mackenzie said, “This new venture will create the biggest producer on the UKCS and demonstrates the long-term attractiveness of the region.”
According to Wood Mackenzie analysis, the new 50/50 venture will:
- Deliver production of nearly 150 000 boe/d in 2025, well ahead of the second largest, Harbour Energy, at 130 000 boe/d.
- Drive 2030 production to 220 000 boe/d, eclipsing the second largest producer in 2030, Ithaca Energy, by over 100 000 boe/d.
“This creates a new UK superpower,” said Anderson. “West of Shetland is a key growth area for the IJV, through the Rosebank, Clair and Victory fields. There is also the potential for future fields, as both companies acquired exploration acreage West of Shetland in the 33rd licensing round.”
Anderson noted that Equinor brings a sizeable tax loss position into the IJV, which combined with Shell's portfolio will realise additional value.
“The deal has come following a time of unprecedented fiscal volatility in the UK with multiple changes to the Energy Profits Levy since 2022,” said Anderson. “A consultation will begin in 2025 on a successor to the EPL post-2030. Despite these ongoing risks, it is clear the UK is still attractive for some companies, and this deal will provide greater certainty for long-term investment on the UKCS.”
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World Pipelines’ December 2024 issue
The December 2024 issue of World Pipelines includes an in-depth Argentinian pipeline outlook; inline inspection case studies; and technical articles on hydrogen pipeline transport, metering and monitoring, and underwater inspection.