Equinor UK Ltd, a subsidiary of Equinor ASA, and Shell UK Limited, a subsidiary of Shell plc, have announced a major energy partnership to create the UK’s largest independent oil and gas producer. This newly formed joint venture will unite their offshore oil and gas assets in the UK North Sea, aiming to bolster domestic production and enhance the nation’s energy security.
The venture, jointly owned by Equinor and Shell, will focus on maximizing the potential of the UK North Sea’s oil and gas resources. By combining decades of expertise, the two companies hope to extend the productive life of the region’s maturing basin, which has been experiencing natural production declines. With its headquarters in Aberdeen, the center of the UK’s energy industry, the joint venture will oversee key assets such as Mariner, Buzzard, and Shearwater fields.
Philippe Mathieu, Equinor’s executive vice president for Exploration and Production International, highlighted the significance of the partnership in driving short-term cash flow for Equinor while supporting the UK’s energy needs. He also emphasized the venture’s role in advancing decarbonization efforts as the nation transitions to cleaner energy sources.
The joint venture represents a strategic effort to maintain reliable energy production as the UK navigates its energy transition. By pooling resources and expertise, the venture seeks to ensure a stable energy supply for households and industries while adapting to evolving demands. Zoë Yujnovich, Shell’s Integrated Gas and Upstream director, described the partnership as critical to both energy security and a balanced transition toward sustainable energy solutions.
By 2025, the venture is expected to produce over 140,000 barrels of oil equivalent per day, solidifying its position as a major player in the UK Continental Shelf. Despite combining their North Sea assets, both companies will retain ownership of other strategic projects. Equinor will keep its offshore wind and cross-border initiatives, while Shell will maintain its floating wind developments and the Acorn carbon capture project.
This partnership offers mutual benefits for Equinor and Shell. Equinor stands to gain from increased short-term production and cash flow, while sharing risks equally through its 50% ownership stake. The transaction, effective from Jan. 1, 2025, is anticipated to close by the end of 2025, pending regulatory approvals.
The collaboration marks a significant step in supporting the UK’s energy security while addressing the challenges of an energy transition. With their combined expertise and resources, Equinor and Shell aim to unlock the full potential of the UK North Sea, ensuring a steady energy supply and contributing to the nation’s evolving energy landscape.
