Equinor UK Ltd and Shell UK Limited, two industry giants, have announced a strategic partnership to form a new, independent company that will become the UK North Sea's largest independent producer. The joint venture (JV) aims to sustain domestic oil and gas production, ensuring a secure energy supply for the UK.

The new company, a 50-50 joint venture between Equinor and Shell, will leverage the combined expertise and assets of both companies to maximize the value of the North Sea's resources. With the basin's natural decline, this partnership will enable continued economic recovery and extend the life of crucial oil and gas fields and platforms.

The transaction is expected to have economic effect on January 1, 2025, and is subject to regulatory approvals. Completion is anticipated by the end of 2025.

Upon completion, the new company will be self-funded, and Equinor's ownership stake will be equity accounted. This structure will allow Equinor to benefit from increased short-term production and cash flow while reducing overall risk exposure.

The new company is expected to produce over 140,000 barrels of oil equivalent per day in 2025. Equinor will retain ownership of its cross-border assets, offshore wind portfolio, and low-carbon energy assets. Shell UK will retain its interests in gas processing, gas terminals, and floating wind projects.

The new entity will encompass a diverse portfolio of assets, including Equinor's interests in Mariner, Rosebank, and Buzzard, and Shell's interests in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion. Additionally, a range of exploration licenses will be included in the transaction.

The joint venture will be headquartered in Aberdeen, the heart of the UK's energy sector. It will invest in the long-term future of the North Sea, ensuring a sustainable and prosperous industry for the UK.

Philippe Mathieu, Equinor's Executive Vice President for Exploration and Production International, expressed his enthusiasm for the partnership and said, "Equinor has been a reliable energy partner to the UK for over 40 years, providing oil and gas, developing the offshore wind industry, and advancing decarbonization. This transaction strengthens Equinor's near-term 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."

Zoë Yujnovich, Shell's Integrated Gas and Upstream Director, emphasized the importance of domestic oil and gas production in the UK's energy mix and said, "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. The new venture will help play a critical role in a balanced energy transition providing the heat for millions of UK homes, the power for industry and the secure supply of fuels people rely on."