Chevron set to divest central UK North Sea assets

Commenting after Chevron announced plans to divest a package of assets in the UK Central North Sea, Kevin Swann, research analyst, North Sea upstream, at global natural resources consultancy Wood Mackenzie, said: “Chevron selling its assets in the UK Central North Sea would continue the trend of Majors divesting non-core UK assets.

"These projects are having to compete for capital on a global scale and simply won't make sense for such big companies, but could be core for a more UK-focused player.”

“It's interesting to note that it looks like Chevron is planning to keep its interest in large West of Shetland assets, Clair and Rosebank, as that too is following a trend for the Majors in becoming more focused on West of Shetland.”

Mr Swann added: “West of Shetland is attractive because it’s relatively under-explored compared to the rest of the UK, with only 160 wells drilled on it so far, versus 500+ in other areas. It also has materiality and longevity, with several very large assets already producing, and new infrastructure in place to service any further discoveries.

“It's a chunky portfolio too, with total reserves on offer of around 180 million barrels of oil equivalent and we expect production from the assets to average around 65,000 barrels of oil equivalent per day this year."

He added: “Potential buyers would depend on the price, but if one company is looking to buy the whole package, it would need to be one with deep pockets. The bigger private equity players could be interested, as could some North Sea independents and international players. However, dividing the assets up into smaller packages would widen the net of potential buyers.”