(Reuters) – British independent oil producer Viaro Energy said on Tuesday it would buy Shell and Exxon Mobil’s assets in Britain’s southern North Sea.
Reuters reported on the negotiations in May, citing sources. One of these sources said the value of the transaction could be $500 million.
Viaro said the company would take full ownership of one of the largest and longest producing gas portfolios on the UK Continental Shelf.
Subject to regulatory approval, Viaro would acquire a portfolio of eleven operating offshore assets and one exploration field, all connected to the Shell-operated Bacton Gas Processing Terminal onshore via the Leman and Clipper fields.
The Bacton Terminal provides a direct route for natural gas produced in the southern and central North Sea to the UK transmission network operated by National Grid, enabling gas to flow between the UK and the Netherlands.
In 2023, the plants would produce around 28,000 barrels of oil equivalent per day (boepd), about 5% of total UK gas production, Viaro added.
This deal would complete Exxon’s withdrawal from the North Sea region, where the company has had a presence since 1964.
An Exxon spokesman said the company expects to close the transaction in 2025, subject to approval. Terms of the transaction are confidential.
The US oil company sold most of its assets in the central and northern North Sea to Neo Energy in 2021, and its rival Chevron is also in the process of divesting its last remaining assets in this ageing basin.
The exit is the latest step in a continued retreat by leading energy companies from the shrinking UK basin, which pioneered deepwater production in the 1970s, as they focus on newer assets worldwide.
The deal also follows Shell’s review of its portfolio in the southern North Sea in the United Kingdom in 2021, with the aim of focusing on areas where the company has competitive advantages, the British oil company said in a separate statement.
Given the importance of gas for Britain’s energy security, Shell has also made investment decisions for the Jackdaw and Victory gas fields to maintain domestic gas production, it said.
Shell remains a major producer in the North Sea, operating several fields, including the newly developed Penguins field, and holding a stake in the BP-operated Clair field.
(Reporting by Arunima Kumar in Bengaluru and Ron Bousso in London; Editing by Anil D’Silva, Shinjini Ganguli and Maju Samuel)
