Shell agrees to buy BP’s stake in North Sea field

BP has agreed to sell its stake in the Shearwater gas hub in the North Sea to Shell.

The oil major had originally planned to sell its 27.5% stake in the asset as part of a $625 million deal with Premier Oil Plc last year, but this was abandoned following a reverse takeover by Chrysaor Holdings Ltd. It more recently lined up Tailwind Energy Ltd. to purchase the assets.

Shell is the operator of the field, however, so it has first refusal on any sale. The new deal effectively supersedes the deal with Tailwind. If approved, the deal will take Shell’s ownership of the asset to 55%, and it will also gain a share of the SILK and SEAL pipelines. Shearwater is an important hub in the North Sea, and it is one of the most productive fields in that sea, with operations expected to continue for some years to come.

BP, which also makes Castrol grease and lubrication oils, is currently divesting about $25 billion worth of assets in order to fund low-carbon projects and reduce its debt burden.

In a statement, a Shell spokesperson said about the deal:

“Shell U.K. Ltd. has agreed to purchase BP’s interest in the Shearwater gas hub. 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.”

The spokesperson did not disclose any details about the terms of the deal, which is still subject to regulatory approval.