Chevron Gears Up for North Sea Departure After Over 55 Years.
The planned divestment, confirmed by Chevron to Reuters on Thursday, aligns with the company’s strategy ahead of the $53 billion acquisition of rival Hess. This acquisition is expected to involve $10 billion to $15 billion in asset sales worldwide.
This move represents the latest withdrawal by major oil and gas companies from the declining British basin, which played a pivotal role in pioneering deepwater production in the 1970s, as they shift their focus to newer assets globally.
Chevron’s UK assets include a 19.4% stake in the BP-operated Clair oilfield, located in the West of Shetland region. The field boasts production of 120,000 barrels per day and is a significant asset in the British North Sea.
UK oil and gas production has experienced a decline from its peak of around 4.5 million barrels of oil equivalent per day in the late 1990s to approximately 1.2 million barrels of oil equivalent per day in 2023.
In addition to its stake in the Clair oilfield, Chevron is also looking to offload its marginal interests in the Sullom Voe oil terminal, along with its stakes in the Ninian and SIRGE pipeline systems, both integral to the hub.
Industry sources suggest that the sale could generate up to $1 billion, excluding tax benefits, with the formal launch of the process expected in June.
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Chevron has clarified that the sale will not impact the operations of its international headquarters in London or its technology center in Aberdeen.
The decision to exit the UK North Sea follows a comprehensive review of Chevron’s global portfolio as CEO Mike Wirth aims to prioritize the firm’s most profitable assets.
This move by Chevron follows the industry trend of North American majors seeking to divest from the UK, according to David Moseley, an analyst at consultancy Welligence. Potential acquirers for Chevron’s assets include independent companies seeking growth opportunities.
Chevron’s divestment plan is part of its broader strategy to maintain capital discipline in both traditional and new energy sectors. The process is expected to unfold over several months.
