After conducting a review of its global portfolio to determine if its assets are strategic and competitive for future capital, Chevron has decided to market all its UK Central North Sea assets for sale, a company spokesperson confirmed to Drilling Contractor in an email.
The assets being marketed for sale include the Alba, Alder, Britannia (and satellite fields), Captain, Elgin/Franklin, Erskine and Jade fields.
“Throughout this process we will continue to execute our business plan and operate safely,” the spokesperson said in the statement.
The company’s decision to sell its UK Central North Sea assets would continue the trend of majors divesting non-core UK assets, said Kevin Swann, Research Analyst, North Sea Upstream with consultancy firm Wood Mackenzie, in a 4 July research note.
“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,” Mr Swann stated.
The assets for sale include total reserves of around 180 million bbl of oil equivalent (boe); Wood Mackenzie expects production from these assets to average around 65,000 boed this year. Larger private equity players could be interested in buying Chevron’s assets, as could some North Sea independents and international players. But dividing the assets up into smaller packages would widen the net of potential buyers, Mr Swann said.
Mr Swann noted that Chevron looks like it’s 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.”
West of Shetland is attractive because it’s relatively unexplored compared with the rest of the UK. So far, only 160 wells have been drilled West of Shetland, compared with more than 500 wells drilled 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.”