According to Reuters, oil giant Shell is preparing to offer for sale its 50% interest in the Leman Alpha complex and a collection of fields in the Clipper hub.
Both sites were operated jointly by Exxon Mobil and Shell when they started up in the 1960s. Exxon has already sold its stakes in North Sea operations to Neo, which is backed by private equity. Shell’s sale is reported to be worth up to a billion US dollars, which will help it meet its goal of divesting $4 billion worth of assets each year on average.
Overall, oil and gas production in the North Sea has been declining since the 1990s, and with the transition to renewable and low-carbon energy sources underway, big oil majors like Shell are increasingly looking to focus on larger new projects that can produce hydrocarbons both more profitably and with a lower intensity of emissions. In line with this, Ben van Beurden, Shell’s CEO, told analysts recently that with oil prices currently being high, it was perhaps time to:
“Think harder if this is the moment to harvest the late-life assets that are probably better off in the hands of others.”
While Shell, which also makes lubricant and grease products, may be divesting its aging assets, it is not leaving the North Sea entirely. For example, it decided to redevelop the Penguins field northeast of the Shetland Islands, and it will also be active in establishing offshore wind farms in the North Sea as part of the energy transition.