So, Shell has put a further bunch of UK North Sea assets on the market. However, we should not be surprised at this. Anasuria, Nelson and Sean are regarded as mature and immaterial.
The rule of thumb is that super-majors need big oil and gas assets to fuel their huge appetites.
In Shell’s case the company has reserves of around 13billion barrels oil equivalent and it produces something over 1billion barrels a year. Exxon, which partners Shell in many but not all of the latter’s North Sea assets through Shell Expro, has an even bigger appetite to satisfy.
It is broadly accepted that older and sometimes smaller assets belong in the hands of far more modest companies generally described as independents.
They are leaner and apparently better able to turn a profit.
Anasuria (a cluster development) and Nelson were not particularly large in the first place and both are CRINE cost reduction era projects where their capital cost had to be reduced if they were to be worthwhile. Anasuria was also an experiment for Shell as this marked the company’s first venture into production ship ownership and operation in the North Sea so, to some extent, it was a test bed.
Shell tried to sell the Anasuria asset in 2010 through Schlumberger’s Indigopool service, but failed to shift it. Perhaps the company will enjoy better luck this time.
As for Nelson, this was originally developed by Enterprise Oil, which was subsequently acquired by the super-major.
One wonders whether Jim House at Apache might acquire it as that company is already a stakeholder, so has intimate knowledge of its performance and future potential.
Turning to Sean, I can’t help but wonder whether Scottish and Southern Energy will buy Shell’s 50% stake. Why? Because, when BP put its 50% up for sale late 2012, SSE bought it. So why not own the whole lot? Seems a good idea to me.
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