Shell and Equinor will combine their UK North Sea offshore oil and gas assets to create a new company with 1,300 employees.
Based in Aberdeen, the company will be the North Sea’s biggest independent producer is expected to produce more than 140,000 barrels of oil equivalent (BOE) a day next year.
There will be no job losses as a result of the deal, Shell said, adding that it could “enhance” the longevity of UK oil and gas jobs.
Norway’s Equinor employs about 300 people in oil and gas roles in the UK, while Shell employs about 1,000 people in similar jobs. Equinor said the 50-50 joint-venture would create a more “cost-competitive” way of exploiting a “once-prolific basin” where “production [is] naturally declining”.
The merger will include Equinor’s vast Rosebank oil field, which sits 80 miles (130km) north-west of Shetland and, with almost 500m barrels of oil and gas, is the UK’s largest untapped oilfield. Climate campaigners recently urged a Scottish court to cancel the licence to drill Rosebank, arguing it would cause “sizeable” and unjustified damage to the planet.
Shell will contribute nine fields to the venture and Equinor will add three.
Shell’s integrated gas and upstream director, Zoe Yujnovich, said “anyone who has a majority of their time” working on Shell and Equinor’s North Sea assets, such as oil rigs, would transfer to the new company.
She added that the deal could result in a “growing and more prosperous combined entity”.
“From an employee point of view, I think that that can really enhance diversity of career choices, but also, I would argue, longevity of their career under the new combined entity.”
She said the new company would “sustain domestic oil and gas production for decades into the future, contributing to UK energy needs”.
However, she added that the North Sea was “no longer the prolific basin that it once was”.
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Yujnovich said: “After decades of production, of course, there is less oil and gas, and the maturity of the basin means that inevitably what is left is more challenging to recover.
“For production from the North Sea, to remain competitive with other global energy hubs, it is imperative that we continue to adapt to that changing reality and to do so proactively.”
The deal is subject to regulatory approval and is expected to close by the end of 2025.