TotalEnergies, NEO NEXT Energy agree to merge UK offshore activities
TotalEnergies has agreed to merge its UK upstream business with NEO NEXT Energy, forming a new operation named NEO NEXT+.
Assuming regulatory clearance and other approvals, the transaction should go through in the first half of next year. TotalEnergies would become the leading shareholder in the new entity.
HitecVision and Repsol UK, the current co-venturers in NEO NEXT Energy, would respectively own 28.875% and 23.625% stakes. Repsol and NEO NEXT completed a merger of their UK North Sea operations in late July.
The combined asset portfolio of the new company will include TotalEnergies’ operated interests in the Elgin/Franklin and Culzean HP/HT gas-condensate complexes in the central UK North Sea; Alwyn North and Dunbar in the northern North Sea; and NEO/Repsol UK’s interests in Penguins, Mariner, Shearwater and various mature producing fields in the central sector.
TotalEnergies added that NEO NEXT+ would become the UK’s largest independent oil and gas producer (a title that Shell/Equinor claimed last week after completing their UK operations merger), with expected production in 2026 of more than 250,000 boe/d.
“TotalEnergies adds significant operational capabilities across project management, especially in high pressure/high temperature gas production operations and a global experience of offshore operations. The NEO NEXT strategy of `Resilience, Yield and Growth’ will remain in place, and NEO NEXT+ will continue to seek other cash accretive transactions," John Knight, executive chair of NEO NEXT and senior partner at HitecVision, said in a recent NEO Next news release. “NEO NEXT+ intends to continue to play a leading role in ownership consolidation activity in the UK Continental Shelf (UKCS) for many years to come. The enlarged NEO NEXT+ business also has an enhanced portfolio of potential near-term development opportunities.”
TotalEnergies Chairman and CEO Patrick Pouyanné added, “TotalEnergies’ consistent focus on running low-cost and low-emissions operations will be instrumental in delivering material economies of scale within the new portfolio of NEO NEXT+, that will enhance the cash flow generation of the company as soon as it is closed."
At present, TotalEnergies claims to operate about 27% of the UKCS’ gas production, with average daily equity production of 121,000 boe/d.
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About the Author
Jeremy Beckman
Editor, Europe
Jeremy Beckman has been Editor Europe, Offshore since 1992. Prior to joining Offshore he was a freelance journalist for eight years, working for a variety of electronics, computing and scientific journals in the UK. He regularly writes news columns on trends and events both in the NW Europe offshore region and globally. He also writes features on developments and technology in exploration and production.