Sector News

Shell may offload its North Sea operations

March 28, 2016

Shell is reportedly exploring a sale of North Sea oil assets. The oil major, which has completed its $35bn (£25bn) merger with BG, has begun sounding out buyers for operations.

Shell’s boss, Ben van Beurden, has already pledged to divest $30bn (£21.5bn) of assets globally and has described the North Sea as “old and mature”.

The Sunday Times reported that there have been early talks with Neptune Oil & Gas, which was set up by Sam Laidlaw, the former boss of Centrica. About 2,500 of Shell’s 7,500 employees work in the North Sea. BG was created in 1997 when British Gas divested Centrica.

In January, a majority of BG shareholders approved the merger with Shell. And the deal has been approved by all the relevant regulatory authorities.

Oil company shares, including Shell, jumped after the Budget earlier this month when the Chancellor cut taxes by £1bn over five years for firms pumping in the North Sea.

George Osborne said he would cut a supplementary tax charge on oil companies to 10 from 20 per cent and scrap the 35 per cent petroleum revenue tax, which had taxed profits for older oil and gas fields. The changes, which will be backdated to 1 January this year, will save the industry around £1bn in the five financial years from 2016-17 to 2020-21.

Shell’s shares are up 9.9 per cent over the year to date, although they remain 20 per cent down on a year earlier, due to the fall in the oil price.

By Ben Chu

Source: The Independent

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