Royal Dutch Shell has agreed to acquire BP’s stake of 27.5% in the producing Shearwater gas field in the UK North Sea, thereby replacing a deal signed by the latter in May 2021.
The deal increases Shell’s stake in the offshore gas field to 55.5%. Shell is already the operator of the field with a stake of 28%.
The financial terms of the deal were not disclosed by Shell.
Last month, BP had agreed to divest its non-operating stake in the Shearwater gas field to Tailwind Energy for an undisclosed price. However, Shell exercised its option of first refusal to the sale of the stake in its role as the operator of the field.
Shell stated: “This is part of a multi-year strategy following a number of earlier growth projects, to strengthen Shearwater’s role as an important gas hub for UK energy supply.
“The move reflects Shell’s strategy of focusing our upstream activities on fewer, existing positions to generate material returns for shareholders and to fund the growth of our new low-carbon portfolio.”
Originally, BP was to sell its stake in the Shearwater gas field to Premier Oil as part of a larger deal worth $625m signed in January 2020. However, the deal could not be closed and subsequently, Premier Oil merged with Chrysaor.
Shearwater is a high-pressure, high-temperature gas condensate field, which has been producing since 2000. Located in Block 22/30b in the Central North Sea, the Shearwater field has been developed through two fixed platforms.
Currently, the Shearwater field produces 18,000 barrels of oil equivalent a day (boe/day).
The gas produced from the Shearwater gas field is transported through the 463km long Shearwater Elgin Area Line (SEAL) pipeline to the Bacton gas terminal. Its oil on the other hand is sent through the GAEL pipeline into the Forties pipeline and eventually onto Cruden Bay and Grangemouth.
