Shell to offload North Sea holdings in £3bn deal

Energy giant Royal Dutch Shell is set to generate billions by selling its holdings in 10 oil fields in the North Sea.

The £3bn move would see the firm divest interests in Buzzard, Bressay, Beryl, Elgin-Franklin, the Greater Armada cluster, J-Block, Everest, Erskine and Lomond to rival firm Chrysaor.

According to a report by Sky News, Shell’s 10% stake in Schiehallion would be included in the transaction.

In total, the fields churn out 115k barrels every day for the FTSE 100 energy company.

Shell said it expects the 400 staff affected will be transferred to Chrysaor as part of the agreement, which is its latest divestment since it acquired British multinational oil and gas company BG Group in 2016.

The deal remains subject to regulatory scrutiny.

Under the financial terms, Chrysaor would pay an initial £2.4bn to be followed by top-up payments linked to energy prices and any future discoveries

Andy Brown, the upstream director at Shell, said: “This deal complements the great strides we have made over the last two years in improving the competitiveness of our UK upstream business.

“We believe this deal is a vote of confidence in the UK North Sea and offers proof that the industry’s increasing competitiveness, and improvements to the fiscal and regulatory regime, are starting to produce positive results.”

He added: “It also contributes to the UK’s goal of maximising economic recovery of oil and gas from the UK North Sea, which will continue to be a source of energy, and revenue, for the country for many years to come.”

In September last year, a report claimed that while the North Sea’s oil and gas industry is undergoing a recovery in production levels, investment is urgently needed.

The research followed news of the Scottish government’s plummeting receipts from the industry.

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