Energy giant Shell has gazumped a smaller North Sea rival by striking a deal to acquire BP’s stake in the Shearwater gas field.
BP announced last month it had agreed to sell its 27.5% stake in Shearwater, about 124 miles east of Aberdeen, to relative North Sea newcomer Tailwind Energy for an undisclosed sum.
Completion was subject to partners’ rights and regulatory approvals but backdated to January 1, 2021.
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.”
Shell UK
Field operator Shell has now bulldozed that deal by confirming it plans to buy the stake in Shearwater, which produces around 18,000 barrels of oil equivalent per day.
The move, confirmed by Shell over the weekend, sees the Anglo-Dutch company exercising its right of first refusal on BP’s stake and will take its total interest in the asset to 55.5%.
Shell is also acquiring 12.176% interests in the Shearwater Elgin Area Line (Seal) and Seal Interconnector Link pipelines from BP, according to the company.
A spokesman for Shell today (June 27) said: “Shell UK Limited has agreed to purchase BP’s interest in the Shearwater gas hub.
“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.”
US firm ExxonMobil currently owns 44.5% of Shearwater but is in the process of selling its stake in the field to NEO Energy.
BP and Tailwind have not responded to requests for comment on the new Shearwater deal, which is subject to regulatory consents.
London-headquartered Tailwind – whose recent activity also includes the acquisition of Aberdeen firm Decipher Energy – is backed by private commodities and energy group Mercuria.
At the time of BP’s Shearwater announcement in May, Tailwind chief executive Steve Edwards said it furthered the company’s growth strategy by adding another “high-quality producing asset” to its portfolio.
Previous failed sale attempt
In January 2020, BP agreed to sell its interests in Shearwater and Andrew to Premier Oil for £475 million.
The deal was subsequently renegotiated to take last year’s slump in oil and gas prices into account.
But it eventually fell through when Chrysaor’s reverse takeover of Premier Oil was announced.
BP is no longer actively marketing its Andrew area, which consists of five fields producing through one platform, about 140 miles north-east of Aberdeen.
Tailwind bought Shell and ExxonMobil’s stakes in the Triton cluster in September 2018.
It followed that deal up by swooping for the UK business of Houston-headquartered oil and gas firm EOG Resources later that year.
Tailwood’s swoop for Decipher, announced earlier this month (June 8), meant an exit from the Aberdeen firm of its founder, Steve Bowyer, a former boss of now-defunct First Oil.
But three of Decipher’s four employees in the Granite City are being kept on by Tailwind.