Shell said it plans to buy the BP stake in the North Sea Shearwater field they share, superseding a deal agreed by the British oil major last month.
“Shell U.K. Ltd. has agreed to purchase BP’s interest in the Shearwater gas hub,” a spokesperson for the Anglo-Dutch company said Friday, without disclosing terms. “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, already the operator of the field, has right of first refusal to any sale by BP. As such, its decision to acquire the stake puts an end to BP’s deal to divest the holding to Tailwind Energy, an explorer backed by trading house Mercuria Energy Group Ltd.
BP and Tailwind didn’t immediately respond to requests for comment.
Shell is acquiring BP’s 27.5% working interest in Shearwater, expanding its stake to 55.5%, and a share of the SEAL and SILK pipelines, according to the company. The deal is subject to regulatory approval.
The planned transaction comes amid a pickup in North Sea mergers and acquisitions as companies look to make the most of crude’s recovery from its pandemic-induced slump. BP’s disposal is part of a $25 billion asset-sale program to help ease its debt burden and fund investments in low-carbon energy.
BP had initially intended to sell the asset to Premier Oil Plc as part of a $625 million package, but the plan was scrapped last year following a reverse takeover of Premier by Chrysaor Holdings Ltd.
Part of an important hub in the North Sea, Shearwater pumps about 18,000 barrels of oil equivalent a day, having peaked in 2004 at more than 160,000 barrels a day.
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