Chevron is Selling Assets in Britain's North Sea as it Exits the Aging Oil Basin - Latest Global News

Chevron is Selling Assets in Britain’s North Sea as it Exits the Aging Oil Basin

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Chevron will sell its remaining British oil and gas assets in the North Sea, ending more than 55 years of operations in the region.

The US oil giant said the decision to leave the North Sea had nothing to do with Britain’s tax system, where energy companies pay 75 percent of profits tax, or the opposition Labor Party’s plans to increase the fuel levy. Labor has a big lead in opinion polls ahead of a general election expected this year.

Instead, Chevron said it reviewed its global portfolio “to assess whether assets are strategic and competitive for future capital.” The decision was first reported by Reuters.

Chevron is the latest oil giant to leave the aging basin and focus on newer oil fields around the world. ExxonMobil said it sold most of its North Sea assets for about $1 billion in 2021, while BP and Shell both sold their portfolios.

Chevron previously sold its stake in the Rosebank field to Equinor in 2018 and about $2 billion in other North Sea assets to Ithaca Energy in 2019, before the region’s recent windfall taxes took effect.

Although Chevron stressed that its decision was not related to taxation, Chris Wheaton, oil and gas analyst at Stifel, said “the threat of an additional tax creates a hostile environment for investment.” [in the UK continental shelf] and Chevron has other assets to invest in.”

Harbor Energy, the largest producer in Britain’s North Sea, agreed in December to an $11.2 billion deal to buy Wintershall Dea’s oil and gas assets from Germany’s BASF.

The latest sale includes Chevron’s 19.4 percent stake in the BP-operated Clair oil field, the largest in the North Sea with production of 120,000 barrels per day. It will have no impact on Chevron’s other operations in the UK, including its international headquarters in London and a technology center in Aberdeen.

Chevron has said it will sell assets worth $15 billion to $20 billion as part of its planned takeover of US energy group Hess, which has been held up by a legal battle with ExxonMobil over assets in Guyana.

The industry’s prospects are likely to play a role in the election campaign in Scotland ahead of this year’s British general election, as the Scottish National Party seeks to fend off challenges to its dominance in the region. The Conservatives are also trying to consolidate support in north-east Scotland.

Labor has proposed increasing the overall tax rate to 78 percent and removing tax breaks for new projects, which it describes as a loophole.

Claire Coutinho, Britain’s energy security and net zero minister, said this week that Labor’s plans would “push Britain into the energy dark age, resulting in a £20 billion black hole in the public finances and the loss of 200,000 jobs.” will lead”.

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