Exclusive: Shell Energy transition fuels talks to sell Norwegian business

LONDON (Reuters) – Shell (SHEL.L) held talks with Harbor Energy (HBR.L) last year to sell Norwegian oil and gas fields, but volatility in gas prices and long-term economic downturns pushed it to the bottom. For certainty, no agreement was reached. -Long-term outlook, sources at the three companies told Reuters.

London-based Shell plans to gradually reduce oil and gas production and grow renewable energy and low-carbon businesses to reduce greenhouse gas emissions.

The sale of Shell’s oil and gas portfolio in Norway, which has existed for over 110 years, marks a continuation from the North Sea by the world’s largest energy company, which is focused on investing in newer, more profitable watersheds. means withdrawal.

Shell and Harbor Energy declined to comment.

Shell shares are little changed at 1145 GMT, while Harbor Energy is up 2.5%.

Just as Norway cemented its position as Europe’s largest natural gas supplier after Russia’s invasion of Ukraine, talks with Britain’s largest North Sea producer Harbor Energy are in advanced stages towards the end of 2022. reached, the source said.

Shell and ConocoPhillips (COP.N) are the last two oil giants to operate offshore fields in Norway, while Total Energies (TTEF.PA) only holds stakes in non-operating fields.

Negotiations with Harbor Energy included Shell assets in Norway, a small business in Italy and some older assets in the British North Sea, the sources said.

Shell’s new chief executive, Wael Sawan, who succeeded Ben van Baden on January 1 after a nine-year tenure, is not currently reviewing these assets, sources said. said the muscle.

windfall tax

Harbor Energy, led by CEO Linda Cook, wants to expand operations beyond the UK’s North Sea after the government imposes a 35% windfall tax on oil and gas producers, bringing total tax rates worldwide 75%, the highest in .

Shell’s hopes to expand oil and gas production in Norway took a hit last year after its partners in the Linorm gas discovery couldn’t agree to develop it as a separate sector, sources said. He is also a partner in the Ormen Lange Phase 3 project, the second largest gas field in the country.

British rival BP (BP.L) has a minority stake in independent oil and gas company Aker BP, Norway’s second largest producer, alongside ExxonMobil (XOM.N) and Chevron (CVX. N) has fully sold its offshore assets in Norway. 2019 and 2018 respectively.

Beyond oil and gas, Shell is involved in several major renewable energy and low carbon projects in Norway, including offshore wind blocks, biofuel plants and Aurora carbon storage and use projects.

According to Shell’s annual report, as of the end of 2021, it holds 21 Norwegian oil and gas production licenses, including a 17.8% stake in Ormen Lange, a 45% stake in the Knarr field and an 8.1% stake in the Troll field. I was.

The company produced approximately 13,400 barrels per day (bpd) of oil and 490 million standard cubic feet per day (scf/d) in Norway in 2021. This is approximately 7% of the company’s total gas production.

Reported by Ron Bousso, additional reported by Nerijus Adomaitis, Oslo.Edited by Alexander Smith

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