Oil sale

Chevron exits ageing North Sea after 55 years

Chevron is leaving the North Sea (pic: Chevron)

Chevron is selling its remaining UK North Sea oil and gas assets, in a move that would mark the U.S. energy giant’s departure from the region after more than 55 years.

The move comes as Chevron prepares for the $53 billion acquisition of rival Hess which it previously said will include $10bn to $15bn in asset sales around the world.

It said its decision has not been influenced by the UK tax regime, which imposes a 75% of tax on profits, or to Labour party’s plans to increase the fuel levy.

Chevron told the Reuters news agency that it had reviewed its global portfolio “to assess whether assets are strategic and competitive for future capital”.

The exit will be the latest step in a steady retreat of top oil and gas companies from the declining British basin as they focus on newer assets around the world.

Chevron’s assets include a 19.4% stake in the BP-operated Clair oilfield in the West of Shetland region, the largest in the British North Sea with production of 120,000 barrels per day.

BP has said it is considering a third development phase for the field, known as Clair South, which is one of the largest remaining untapped fields in the North Sea.

UK oil and gas production has dropped from a peak of around 4.5 million barrels of oil equivalent per day (boed) in the late 1990s to around 1.2 million boed in 2023.

Chevron is also seeking to sell its marginal interests in the Sullom Voe oil terminal, as well as its stakes in the Ninian and SIRGE pipeline systems which are both linked to the hub, it said in a statement.

The sale could raise up to $1 billion excluding tax benefits, one industry source said. The process is expected to be formally launched in June, industry sources told Reuters.

It will not impact the operations of Chevron’s international headquarters in London or its technology centre in Aberdeen, the company said.

The exit follows a review of Chevron’s global portfolio as CEO Mike Wirth seeks to focus on the firm’s most profitable assets, Chevron said.

In 2018, Chevron sold its stake in the controversial Rosebank field development to Equinor. A year later it sold many of its North Sea assets to Ithaca Energy. Other major oil companies, including Exxon Mobil ConocoPhillips and Shell, have sold assets in the basin since the 2000s.

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