Shell and Equinor announced plans to place much of their British North Sea oil and gas production into an equally owned joint venture headquartered in Aberdeen. The companies said the combination would create the basin's largest independent producer, bringing mature fields and new developments under a single operating structure.
The venture was expected to produce more than 140,000 barrels of oil equivalent per day in 2025. Equinor executive Philippe Mathieu projected output of about 200,000 to 220,000 barrels a day within five years as projects including Rosebank entered production. Shell's Jackdaw gas field was another significant development included in the transaction.
Assets moving into the company from Equinor included interests in Mariner, Rosebank and Buzzard. Shell planned to contribute stakes in nine fields: Clair, Gannet, Jackdaw, Nelson, Penguins, Pierce, Schiehallion, Shearwater and Victory, along with exploration licences. Both groups retained selected infrastructure and activities outside the deal.
Equinor kept the Utgard, Barnacle and Statfjord cross-border interests, as well as its British offshore wind, hydrogen, carbon capture, power, battery and storage holdings. Shell retained stakes in the Fife natural-gas-liquids plant, the St Fergus gas terminal, and its MarramWind and CampionWind floating-wind projects.
The partners framed the merger as a response to the economics of an ageing continental shelf. UK production had fallen from about 4.4 million barrels of oil equivalent a day around the start of the century to roughly 1.3 million. Higher operating costs, declining fields and the government's windfall tax had increased pressure on companies to cut spending or leave the basin.
Combining teams, capital programmes and tax positions offered a way to extend field life. RBC Capital Markets estimated that the accounting treatment would reduce planned Equinor spending on capital projects by $1.2 billion from 2025 through 2027. The Norwegian company also contributed around £6 billion in deferred tax losses that could offset qualifying future expenditure.
Shell upstream director Zoe Yujnovich said there was no plan for an initial public offering, although the venture would be able to raise its own debt. The structure allowed both parents to share exposure while giving the new operator a focused North Sea portfolio. Completion would turn two established producers into a larger standalone platform designed to manage both late-life assets and the next wave of UK projects.
The venture also reflected a broader industry pattern. Eni and Ithaca Energy had created another UK combination in 2024, while Aker BP emerged from a Norwegian merger in 2016. In each case, consolidation offered a way to spread costs across portfolios in mature offshore regions.
