Oil giant Shell has agreed a deal that could see it increase its stake in the BP-operated Schiehallion field to nearly 50%.
US-based Hess plans to sell its 15.67% stake in Schiehallion to Shell, which already has a 33% interest. Hess said the move, subject to regulatory approval, was part of its portfolio management and optimisation. Shell is not thought to be looking to take over operatorship of the field, 108 miles west of Shetland, from BP.
Schiehallion started production in 1998 and is undergoing a £3billion redevelopment programme, led by BP. A floating production, storage and offloading (FPSO) vessel which has been on the field since 1998 is to be replaced by a new one being built in South Korea. Production from the new unit is expected to start in 2016.
A spokesman for Shell said: “Shell has a solid portfolio in the UK and continuously looks for opportunities that add value to it. Increasing our 33% stake in the Schiehallion joint venture would fit well with our strategic objectives.”
A spokesman for BP said the field was producing often in excess of 50,000 barrels of oil equivalent (boe) per day. BP says Schiehallion and Loyal are estimated to still contain reserves of 450million boe.
Yesterday’s announcement from Hess marks another significant asset being sold off by the firm in the North Sea.
Earlier this year it agreed it would hand over operatorship of the Triton floating production to Dana Petroleum as part of a deal in which Dana would increase ownership in the Bittern field.
Greg Hill, Hess’s president for worldwide exploration and production, said yesterday: “Selling these non-operated, non-core assets will help us sustain the profitable growth of our production and reserves.”
Hess still has operatorship of the Cambo exploration licence west of Shetland, an interest in the Beryl field plus North Sea assets it is involved in decommissioning.
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