Chevron to end North Sea presence with Clair field sale
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Chevron is reportedly selling its stake in the Clair field and other North Sea assets. The energy corporation plans to sell a 19.4% stake in the Clair field region, one of the UK’s most considerable hydrocarbon resources.
This move by Chevron marks its exit from the oil and gas-producing region after 55 years. This decision comes as Chevron gears up to acquire oil and gas producer Hess. The acquisition, worth $53 billion, is currently held up by a legal tussle with ExxonMobil regarding Hess’ 30% stake in the Staebrock block.
Chevron reports that the decision to exit the Clair field region resulted from a global review to assess whether its assets are strategies and competitive to benefit in the long run. It also emphasises that the sale in the Clair oilfield region might take months to complete, and a sale outcome may not be reached.
This is not the first time Chevron has committed to such a move. In 2018, Chevron finalised a deal to offload 40% of its operating interest in Rosebank to Equinor, indicating its intention to transfer its assets from the North Sea. Additionally, in 2019, the energy company agreed to divest ten fields to Ithaca Energy.
This move prompted speculation that Chevron is withdrawing from the North Sea due to the UK’s political tensions and increasing concerns about the business performance and competition within the UK basin.
Some theories suggest the decision is linked to the UK’s windfall tax announcement. However, Chevron has refuted these speculations.
Russia’s invasion of Ukraine triggered an increase in market prices, prompting the UK to introduce the windfall tax. The tax currently charged at 35% was announced in 2022 and will be in force until 2029.
According to The Telegraph, Chevron’s decision stems from Chancellor of the Exchequer Jeremy Hunt‘s rejection of the industry’s pleas to scrap the law.
Also read: 50 MPs plead Rishi Sunak to backtrack on oil and gas extraction plans
In addition, oil and gas production in the UK faces political tensions as cross-party politicians press the government to cease licensing and shift the focus to climate goals. Following all the developments, Chevron is not the only energy corporation planning to move from the North Sea. Bp, ExxonMobil, and Shell are other prominent players seeking to exit the North Sea.
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