Chevron to exit UK North Sea

Chevron has announced plans to divest its remaining oil and gas assets in the UK North Sea, marking its exit from the region after over 55 years. This decision, confirmed to Reuters on May 16, aligns with Chevron’s broader strategy to focus on more lucrative opportunities worldwide, especially as it prepares for a $53bn acquisition of Hess. This acquisition is expected to include $10-$15bn in global asset sales.

Chevron is among a number of major oil and gas companies looking to withdraw from the ageing North Sea basin. Production in the mature region is falling, and the investment climate has been undermined by a windfall tax introduced by the UK government in 2022.

Among Chevron's North Sea assets is a 19.4% stake in the BP-operated Clair oilfield, the largest in the region, producing 120,000 barrels per day. BP is contemplating a third development phase for this field, known as Clair South, which remains one of the largest untapped fields in the North Sea.

Additionally, Chevron plans to sell its minor interests in the Sullom Voe oil terminal and its stakes in the Ninian and SIRGE pipeline systems. The sales process is expected to start in June and could generate up to $1bn, according to industry sources. Despite these sales, Chevron’s international headquarters in London and its technology center in Aberdeen will not be affected.

This move follows Chevron's strategic review under CEO Mike Wirth, aiming to prioritise the company's most profitable assets. In recent years, Chevron has already sold several North Sea interests, including its stake in the Rosebank field to Equinor in 2018 and many assets to Ithaca Energy in 2019. Other major companies like ExxonMobil, ConocoPhillips and Shell have also scaled back their presence in the basin since the 2000s.

Chevron stated that this sale is part of its strategy to maintain capital discipline and was unrelated to the 35% windfall tax imposed by the UK government. "As part of Chevron's focus on maintaining capital discipline in both traditional and new energies, we regularly review our global portfolio to assess whether assets are strategic and competitive for future capital," the company said.