Shell in move to offload North Sea oil assets

Shell is considering the sale of its North Sea oil assets, according to reports. The oil major, which had completed its $35-billion merger with BG, had started sounding out buyers for operations.

Shell chief, Ben van Beurden, had already pledged to divest $30 billion worth of assets globally and had described the North Sea as ''old and mature''.

According to The Sunday Times, early talks had been held with Neptune Oil & Gas, a $5-billion investment fund set up by Sam Laidlaw, the former boss of Centrica. Around 2,500 of the 7,500 employees of Shell worked in the North Sea. BG was created in 1997 with divestment of Centrica by British Gas.

The merger of BG with Shell was approved by a majority of BG shareholders in January. The deal had also been approved by all the relevant regulatory authorities.

The shares of oil companies shot up after the budget earlier this month when the chancellor, George Osborne, cut taxes by £1 billion over a five-year period for companies pumping in the North Sea.

According to Osborne, he would cut a supplementary tax charge on oil companies to 10 per cent from 20 per cent and scrap the 35 per cent petroleum revenue tax, under which profits for older oil and gas fields had been taxed.

The changes, would be backdated to 1 January this year, and the industry would save £1 billion in the five financial years from 2016-17 to 2020-21.

Meanwhile, Neptune Oil and Gas had confirmed that it was in talks with Bank of America Merrill Lynch to take advantage of Shell's ambitious sales plans.

According to spokesman for the fund, Shell's assets were being considered as part of its wider strategy to target large-scale investment in distressed assets in the North Sea, North Africa and South East Asia.