Shell and Equinor announce joint venture’s name

Shell and Equinor have announced the name of their UK joint venture, which will become the country’s biggest independent producer.

The newly named Adura was announced in December as the European supermajors looked to tie up their UK assets under one firm.

The firms said that the name brings together the ‘A’ of Aberdeen and the ‘dura’ from durability.

© Ryan Duff/DCT Media

The business, which is set to be headquartered in the Aberdeen city centre, will not start operating until the end of the year.

In April, Shell announced that the business will be located in its current north-east Scotland base, the Silver Fin building on Union Street.

The deal with the Norwegian firm will mark an end to Shell as an operator of North Sea oil and gas assets, bringing to a close decades of history since it achieved first oil from the Brent field in 1976.

© Supplied by DC Thomson

The joint venture is predicted to produce over 140,000 barrels of oil equivalent per day as it takes ownership of stakes in Equinor’s Mariner, Rosebank and Buzzard fields and Shell’s Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair and Schiehallion.

Simon Roddy, senior vice president of Shell UK upstream, said: “Adura takes an exciting step forward today as we unveil its new name – rooted in a proud history in the North Sea and looking forward with confidence to delivering secure energy for the UK for many years to come.

“When Adura launches later this year it will become the UK’s largest independent producer. Through combining assets and expertise we will create a robust portfolio, with a shared purpose, to unlock long term value.”

© Supplied by Shell

At the time of the initial announcement, Shell bosses confirmed that 1,300 workers from across Aberdeen will be joining its independent North Sea joint venture (IJV) with Equinor. Both firms will hold a 50% share in the business.

Despite the even split in ownership, 1,000 workers will join Adura from Shell while 300 will come on board from Equinor.

Camilla Salthe, senior vice president of Equinor UK upstream, said: “For us, the name Adura represents the very heart of this company and speaks to its people and place within an energy community anchored in Aberdeen, alongside its longevity and commitment to the North Sea.”

© Supplied by Equinor

Drawing attention to the Granite City’s oil and gas heritage, Aberdeen and Grampian Chamber of Commerce chief executive, Russell Borthwick, offered his opinion on the news.

He said: “Despite the slings and arrows thrown at the sector in recent years, for as long as we need oil and gas we should be proud to produce our own, applaud those skilled workers involved in doing so and feel extraordinarily lucky that companies choose to headquarter and continue to invest in the Granite City.”

UK opportunities for Adura

Previously, Simon Roddy, senior vice-president for upstream at Shell, said that the IJV presents an opportunity as his firm continues to operate in a “basin in decline”.

“This is really an opportunity for us to shape the future of energy and really have a company that is absolutely focused on the potential of the North Sea,” Roddy commented in December.

The move was initially welcomed by analysts who saw the move as an opportunity to secure increased capital for UK operations, as the business will not have to compete with overseas regions.

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Panmure Liberum director and oil and gas research analyst Ashley Kelty previously said: “The new venture will be better placed for future investment as it will not be competing for capital with other projects in the global portfolios of Shell and Equinor, and management will be focused on the strong UKCS asset base.”

Both Shell and Equinor are currently facing regulatory challenges after a landmark court ruling deemed the government’s approval of Rosebank and Jackdaw unlawful.

Last week, Westminster unveiled new guidance for environmental impact assessments (EIAs) for North Sea production. This means that Rosebank and Jackdaw will both have to resubmit EIAs, which will then be subject to government approval.

M&A rumours quashed

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Recently, there has been media speculation that Shell is pursuing a takeover of its fellow British supermajor BP.

However, on the same day that it announced its new business’ name, Shell denied that it was pursuing the £65 billion deal.

A Shell spokesperson said: “This is further market speculation. No talks are taking place.

“As we have said many times before we are sharply focused on capturing the value in Shell through continuing to focus on performance, discipline and simplification.”

An update from the company reiterated this, saying “it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer.”

Under stock market rules, the business is unable to pursue a takeover bid of its British rival without one of a handful of criteria being met.

BP can attempt a reverse takeover, for example, or Shell can approach with an offer if there has been a “material change of circumstances,” determined by the takeover panel.