Chevron is pulling out of the North Sea and announced that it will launch the sale of its last oil and gas assets in the United Kingdom. This decision will mark the U.S. energy company’s withdrawal from this former basin where it has operated for more than five decades.
Chevron pulls out of North Sea as it prepares Hess acquisition
Confirmation of this fact was made to Reuters on Thursday, just as Chevron prepares to acquire rival Hess for $53 billion. This agreement will include between US$10 billion and US$15 billion in global asset sales, the company had previously indicated.
On the other hand, Chevron’s exit is part of a broader trend, in which the major oil and gas companies oil and gas the UK basin are gradually withdrawing from the basin. This region, which pioneered deepwater production in the 1970s, is being bypassed in favor of newer, more profitable assets around the world.
Chevron’s assets include a 19.4% interest in the Clair oil field, which is operated by BP in the western Shetland region. This is the largest field in the British North Sea, producing 120,000 barrels per day. In addition, BP has indicated that it is considering a third phase of development for the Clair field, known as Clair South, one of the largest remaining undeveloped fields in the region.
Chevron’s plans
Chevron is also seeking to sell its interests in the Sullom Voe oil terminal, as well as in the SIRGE pipeline systems of the Ninian pipeline, both of which are connected to Sullom Voe. According to industry sources, this sale could generate up to US$1 billion, not including tax benefits. The sale process is expected to formally begin in June.
In the context of this withdrawal, Chevron has been reviewing its global portfolio, with CEO Mike Wirth focused on concentrating the company’s resources on the most profitable assets and it is worth remembering that in 2019, Chevron had already sold many of its North Sea assets to Ithaca Energy. Likewise, since the 2010s, other major oil companies, such as Exxon Mobil and Shell, have also sold assets in this basin.
Chevron to sell assets despite Exxon dispute
Finally, Chevron has mentioned that it will sell between $15 billion and $20 billion in assets as part of its acquisition of Hess. However, this operation has been hampered by a legal dispute with Exxon over assets in Guyana.
Chevron clarified that the sale of assets in the North Sea is not related to the extraordinary 35% tax imposed by the British government on producers following the increase in energy prices in 2022.
Chevron emphasized its commitment to capital discipline, periodically reviewing its global portfolio to assess the competitiveness and strategic relevance of its assets, and this sale process is expected to take several months.
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Source: naturalgasworld
Photo: Shutterstock
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