The Courier & Advertiser (Fife Edition)
Shell eyes 50 more years in North Sea
Oil giant Shell could still be operating in the North Sea in another 50 years.
The prediction was made as the energy group celebrated five decades of production in the region, which first started at the Leman gas field in 1968.
Shell recently offloaded several assets, including a £3 billion sale to Chrysaor last year, but the supermajor said it was now in a better position to exploit opportunities in the basin for years to come.
Steve Phimister, UK upstream vicepresident, said Shell will continue to invest up to $800 million of new capital every year to grow its North Sea business.
It comes while Total is seeking a £1bn sale of assets, and Chevron plans to sell all of its installations in the central North Sea.
ConocoPhillips is also reportedly considering an exit after it announced plans to cut 450 UK jobs.
However, Mr Phimister said Shell saw a bright future for the region. He said: “We’re definitely committed to the North Sea and to the UK sector in particular.
“We have, over the last few years, gone through a lot of change. We turned the company around as we weren’t in the place we wanted to be. We’re now a lot more productive, a lot more efficient and definitely lower cost.
“Our production costs today are a third of what they were four or five years ago.
“We’ll go on investing somewhere between $600-$800m of new capital every year to grow our business.
“We’re very proud of our business here, particularly the good shape it’s in these days and the future we think we have – maybe another 50 years.”
Meanwhile, oil producer Neptune Energy has agreed to buy stakes in a number of North Sea fields from US firm Apache.
Neptune will acquire 35% of the Seagull development and 50% of the Isabella prospect.
Apache is the operator of both fields. The transaction value was not disclosed.
The company said the deals would give it low-cost, near-term development options near existing infrastructure in the central North Sea.