In the latest switch, Shell has put up for sale a swath of oil and gas producing assets including the Cormorant, Tern and Eider fields while scrapping proposals for a £25m new "centre of excellence" in the UK oil capital, Aberdeen. Most of the assets are jointly owned by Exxon which is also selling out. The move comes on top of BP's surprise announcement last month that it had dropped plans to develop a revolutionary new carbon sequestration plant at Peterhead in Scotland which would be attached to the Miller field in the North Sea. The same company has already sold off some of Britain's largest and most famous North Sea fields such as Forties.
BP has also been disposing of chemical plants and oil refineries in Britain, bringing an end to its ownership of Grangemouth and most recently the Coryton facility in Essex.
All three companies have denied that they have lost interest in a country that has played such a vital role in the earlier life of their businesses. They present many of the changes as just a normal part of the financial process where the asset base is continually assessed.
Companies such as BP also point to other developments, such as its plan to build a £400m biofuels plant near Hull, as a symbol of its continuing commitment to Britain- while Shell says it is in the middle of a £500m spending spree to upgrade some of the older North Sea platforms. UK Oil & Gas, the trade body for the North Sea oil industry, says it is natural that a hydrocarbon province will go through various phases from early frontier to mature region. In the latter stage - which Britain has reached - it is to be expected that smaller independents should take over from the big companies to extract the last of the oil or gas.
A recent survey from consultant Hannon Westwood reported that at least 220 new wells are to be drilled in UK waters between now and 2009 - twice the number that were planned for the same period six months ago. But the UK pumped 2.9m barrels a day of oil and gas on average during 2006, 9% lower than the year before despite a big increase in investment to £11.5bn. Half of this money was needed to keep the fields running at a time of rising costs. The glory days of the North Sea are over and a lot of the big financial muscle has withdrawn. The new breed of companies buying acreage are no mighty oaks. One is a firm with a handful of staff called Acorn Oil & Gas.
Tags: UK,BP
