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Shell moves in on BP

Shearwater position

UK ROYAL Dutch Shell looks set to pick up rival portfolio.”
BP’s stake in the Shearwater gas field in the UK Following a landmark court ruling in the
BP had hoped to sell North Sea, after exercising its right as the pro- Netherlands, Shell has vowed to do more to scale
the stake to Premier Oil, ject’s operator to match a bid by Tailwind Energy. back its emissions in the years ahead. Expanding
which is now part of Tailwind, backed by private equity group its interests in select projects while divesting oth-
Harbour Energy. Mercuria, struck a deal to buy BP’s 27.5% inter- ers makes sense, as the company will have fewer
est in the field in May. But Shell has now reached facilities to invest in making cleaner.
its own agreement to acquire the equity holding. Shell did not say how much it had agreed to
If the deal is closed, the Anglo-Dutch major will pay for the stake, although it did note that the
bolster its ownership position at Shearwater to deal was subject to regulatory approvals. Tail-
55.5%. It will also gain shares in the SEAL and wind, which bought a package of North Sea
SILK oil and gas pipelines. assets from Shell and US major ExxonMobil in
BP has been seeking to part with its stake 2018, is yet to comment on the matter.
at Shearwater for some deal, initially agree- Shell is near to finishing a redevelopment
ing to transfer the share to Premier Oil for at project that will enable gas from Shearwater to
least $625mn. But that deal’s price tag was later be directed via pipeline to St Fergus in north-
slashed by almost two thirds and the transaction east Scotland and nearby petrochemical plants,
was cancelled altogether after Premier agreed to including the Mossmorran natural gas liq-
merge with Chrysaor to form Harbour Energy. uids (NGL) facilities. This will enable the gas
Shell’s bid stands out from the trend, as the to fetch a higher price than under the current
oil and gas majors have generally been scaling option, where it is pumped to Bacton in eastern
back their North Sea operations in recent years England.
to focus on higher-margin plays elsewhere. In Shearwater is also set to serve as a hub for a
a statement, the company explained the move, number of other North Sea gas and condensate
saying it reflected its “strategy of focusing our projects in the region, such as Arran and Colum-
upstream activities on fewer, existing positions bus. At peak flow, its wet gas export capacity is
to generate material returns for shareholders expected to be around 400mn cubic feet per day
and to fund [the] growth of our new low-carbon (4.13bn cubic metres per year). ™

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