Oil supermajor Shell said yesterday a deal taking its stake in the BP-operated Schiehallion field to 55% would give it access to extra reserves in its North Sea heartland.
Shell has agreed to buy US firm Murphy Oil’s 5.9% stake in Schiehallion, increasing its majority ownership in the field.
The value of the deal was not disclosed but US firm Hess is already selling its near-16% stake in Schiehallion to Shell for about £317million, putting the UK/Dutch group’s latest acquisition at an estimated £117million.
Schiehallion started production in 1998 and, with the nearby Loyal field, is undergoing a £3billion redevelopment programme.
This includes replacing a floating production, storage and offloading vessel, which has been on the field since 1998, with production from the unit expected to start in 2016.
Shell said the increased ownership in Schiehallion, 108 miles west of Shetland, would give it access to substantial additional reserves and redevelopment potential in the UK, “a current and future heartland for Shell Upstream in Europe”.
A spokesman for the firm said: “This announcement is further proof of Shell’s ongoing commitment to the UK North Sea.
“We invest around £1.25billion a year in the UK upstream sector, with around half of this directed at our existing assets and the remainder on new projects. We also employ over 6,000 people in UK upstream.”
Until May, Shell had held a similar stake in Schiehallion to BP, at 33%, but it then agreed to buy Hess’s 15.7% interest in the field.
Earlier this year, BP said Schiehallion often produced more than 50,000 barrels of oil equivalent (boe) per day. Schiehallion and Loyal are estimated to still contain reserves of 450million boe.
Shell has said it does not want to take over operatorship of the field, despite being the majority owner.
Other joint-venture partners in Schiehallion are BP with 33.5%, Statoil 5.9% and OMV 5.9%.
Murphy Oil’s sale of its stake was part of a wider sale of its North Sea assets, including 7-12% stakes in BP’s Amethyst and Mungo/Monan fields.
In a separate deal also announced yesterday, Shell said it was selling its interest in the Seal area within the Peace River oil sands of Alberta, Canada, to Arkansas-based Murphy Oil.
Oil and gas explorer Antrim Energy expects drilling to start on the central North Sea Cyclone prospect before the end of the year.
Cyclone, operated and 70% owned by Premier Oil, will be drilled using a semisubmersible rig.
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