Sale of Shell's Northern North Sea Assets
Thursday 14 June 2007
Sale of Shell's Northern North Sea Assets
Commenting on the announcement by Shell UK Limited today that it intends, along with Esso Exploration and Production UK Limited, to market a portfolio of their northern North Sea assets, Oil & Gas UK, the representative organisation for the UK offshore oil and gas industry, said that the move was a positive one for the North Sea.
Mike Tholen, Oil & Gas UK's economic and commercial director, said: "The transfer of assets will undoubtedly attract new investment and enhance ultimate recovery of oil and gas from those fields which is in the interests of all stakeholders in the North Sea.
"Since 1999, over 30 new companies have entered the UK continental shelf with a commitment to invest in oil and gas assets. These companies now account for 38% of the industry's total investment in the UK offshore and 16% of production."
Mike Tholen added that the sale emphasised the need for an appropriate fiscal regime which encourages investment in mature assets such as those found in the northern North Sea so that investors continue to find the UK oil and gas prospects attractive.
He also said that the sale of Shell's assets highlights the need for the government to provide regulatory and fiscal certainty on decommissioning.
Uncertainty on the fiscal treatment of decommissioning spending is forcing companies to over-provide for the future, making asset trading much more costly, he added.
Negotiations on deals take longer and are more protracted, not least because under current legislation, vendors cannot achieve a clean break from their decommissioning liabilities when selling an asset.
Sally Fraser
Oil & Gas UK Media Relations
2nd Floor
232-242 Vauxhall Bridge Road
London SW1V 1AU
Tel: 020 7802 2404
Fax: 020 7802 2401
Email: sfraser@oilandgasuk.co.uk
Pager : 07659 183 999
NOTE TO EDITORS
Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry. Its members are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industrys supply chain. It has 60 members.
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