Equinor and Shell to create the UK's largest independent oil and gas company

05 Dec 2024 08:11 CET

Equinor UK Ltd, a subsidiary of Equinor ASA (OSE: EQNR, NYSE: EQNR, "Equinor")
and Shell UK Limited, a subsidiary of Shell plc (LSE: SHEL, NYSE: ADR SHEL, AMS
EURONEXT: SHELL, "Shell") are to combine their UK offshore oil & gas assets and
expertise to form a new company which will be the UK North Sea's biggest
independent producer. The incorporated joint venture (IJV) will be set up to
sustain domestic oil and gas production and security of energy supply in the UK.

On deal completion, the new independent producer will be jointly owned by
Equinor (50%) and Shell (50%), two leading global energy companies with decades
of experience operating in the UK North Sea. With the once prolific basin now
maturing and production naturally declining, the combination of portfolios and
expertise will allow continued economic recovery of this vital UK resource. The
new company will be more agile, focused, cost-competitive and strategically well
positioned to maximise the value of its combined portfolios on the UK
Continental Shelf.

The new company will invest to provide a long-term future for the individual oil
and gas fields and platforms, helping extend the life of this crucial sector for
the benefit of the UK. Based in Aberdeen, the heart of the nation's energy
sector, the joint venture will include Equinor's equity interests in Mariner,
Rosebank and Buzzard, and Shell's equity interests in Shearwater, Penguins,
Gannet, Nelson, Pierce, Jackdaw, Victory, Clair and Schiehallion. A range of
exploration licenses will also be part of the transaction.

Both Equinor and Shell are proud to continue the development of the North Sea as
investing partners rather than individual operators, opening a new chapter in
which they will remain significant players in the UK energy sector.

Following completion, the new company will be self-funded, Equinor's ownership
stake will be equity accounted, and no organic capital expenditures related to
this investment will be reported by Equinor. This transaction enables Equinor to
benefit from increased short-term production and cash flow. The more balanced
ownership structure of the assets also contributes to reduced overall risk
exposure.

Equinor's Executive Vice President for Exploration and Production International,
Philippe Mathieu, said: "Equinor has been a reliable energy partner to the UK
for over 40 years, providing oil and gas, developing the offshore wind industry,
and advancing decarbonisation. This transaction strengthens Equinor's near-term
cash flow, and by combining Equinor's and Shell's long-standing expertise and
competitive assets, this new entity will play a crucial role in securing the
UK's energy supply."

Shell's Integrated Gas and Upstream Director, Zoë Yujnovich, commented:
"Domestically produced oil and gas is expected to have a significant role to
play in the future of the UK's energy system. To achieve this in an already
mature basin, we are combining forces with Equinor, a partner of many years. The
new venture will help play a critical role in a balanced energy transition
providing the heat for millions of UK homes, the power for industry and the
secure supply of fuels people rely on."

The transaction has economic effect on 1st January 2025. Completion of the
transaction remains subject to approvals and is expected by the end of 2025.

Notes to Editors

* In the UK, Equinor currently produces approx. 38,000 barrels of oil
equivalent per day; Shell UK produces over 100,000 barrels of oil equivalent
per day. The new company is expected to produce over 140,000 barrels of oil
equivalent per day in 2025.
* Equinor will retain ownership of its cross-border assets, Utgard, Barnacle
and Statfjord and offshore wind portfolio including Sheringham Shoal,
Dudgeon, Hywind Scotland and Dogger Bank. It will also retain the hydrogen,
carbon capture and storage, power generation, battery storage and gas
storage assets.
* Shell UK will retain ownership of its interests in the Fife NGL plant, St
Fergus Gas Terminal and floating wind projects under development -
MarramWind and CampionWind. Shell UK will also remain Technical Developer of
Acorn, Scotland's largest carbon capture and storage project.
* Equinor employs around 300 people in oil and gas roles in the UK, while
Shell employs approximately 1,000 in similar oil and gas positions across
the country.

Contact details:

Investor relations
Bård Glad Pedersen, senior vice president Investor Relations,
+47 918 01 791

Media
Ola Morten Aanestad, Media Relations,
+47 480 80 212

This information is subject to the disclosure requirements pursuant to Section
5-12 of the Norwegian Securities Trading Act

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