Aug 6, 2017

Shell and BP’s commitment to North Sea oil ‘rock solid’

Royal Dutch Shell and BP have declared confidence in the future of North Sea oil and gas production after deep cost cuts that executives say have pulled the basin back from the brink of precipitous decline. Both groups have sold a series of assets in UK waters during the past year, creating an impression that two of the main pioneers behind the North Sea oil industry in the 1970s were retreating from the region they helped develop. Bob Dudley, BP chief executive, told the Financial Times that his company's commitment to the North Sea remained "Rock solid" and highlighted the group's plan to double its UK offshore production to 200,000 barrels per day by 2020. Ben van Beurden, chief executive of Shell, has signalled that he too is once again viewing the North Sea as an investment opportunity, despite selling more than half of the group's UK production to Chrysaor, a small UK company backed by US private equity funds, for up to $3.8bn in January. Last month, Mr van Beurden identified the Penguins field in the northern North Sea as among a handful of projects around the world that Shell would consider giving the green light to in the next 18 months.

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