Chevron is preparing to call time on more than five decades in the North Sea with a plan to sell its remaining oil and gas fields in the ageing oil basin.
The US oil company said on Thursday that it will launch a sale of its North Sea interests, including a 19.4% stake in the giant Claire oilfield in the West of Shetland region, which could raise up to $1bn.
The US “supermajor”, which has a market value of almost $300bn, said the decision to leave the North Sea after more than 55 years operating in UK waters followed a review of its global operations to set which assets remain “strategic and competitive”.
The company denied that the decision was linked to the UK government’s tax regime, which imposed a 35% windfall tax on North Sea producers after the surge in global energy markets following Russia’s invasion of Ukraine in early 2022.
The timing of the decision has reportedly coincided with a key meeting between Jeremy Hunt and the leaders of many North Sea oil companies, in which the executives called for the tax to be dropped. The chancellor refused to commit to easing the levy, according to the Daily Telegraph.
Oil companies could face higher taxes under a Labour government. The party has pledged to raise the windfall tax, known as the energy profits levy, to bring the total tax on North Sea profits to 78%. This tax rate, which is in line with Norway’s tax regime, could raise £10bn for the Treasury, according to the party.
The Claire oilfield is the largest in the UK’s North Sea basin. It produces about 120,000 barrels of oil a day and holds reserves of up 8bn barrels. Chevron will sell its interests in the Sullom Voe Terminal, the Ninian pipeline and the Shetland Islands Regional Gas Export pipeline.
The company was one of the first oil companies to drill in the North Sea in the 1960s and is one of the last major oil companies still operating in the oil basin.
It began its retreat in 2018 with the sale of its stake in the controversial Rosebank oil development to Equinor, followed by the sale of many of its North Sea assets to Ithaca Energy a year later.
Other major oil companies – including Exxon Mobil, ConocoPhillips and Shell – have all shrunk their interests in the basin since the 2000s as reserves have declined and new oil frontiers have opened up in other parts of the world.
