The deal supersedes an agreement signed earlier by BP, where it agreed to sell its stake in the field to Tailwind Energy, reported Bloomberg.
Completion of the deal with Tailwind was subject to partner and regulatory approvals.
As the operator of the Shearwater field, Shell exercised its ‘right of first refusal’ to end the deal between BP and Tailwind.
The latest agreement, which is subject to regulatory approval, will increase Shell’s stake in the field to 55.5%.
Moreover, Shell is purchasing BP’s stake of 12.176% in the Shearwater Elgin Area Line (Seal) and Seal Interconnector Link pipelines.
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A Shell spokesperson was reported by Reuters as saying: “Shell UK Ltd has agreed to purchase BP’s interest in the Shearwater gas hub.
“This is part of a multi-year strategy following a number of earlier growth projects, to strengthen Shearwater’s role as an important gas hub for UK energy supply.
“The move reflects Shell’s strategy of focusing our upstream activities on fewer, existing positions to generate material returns for shareholders and to fund the growth of our new low-carbon portfolio.”
The sale forms part of BP’s $25bn asset-sale programme aimed at reducing debt and fund low-carbon energy investments.
The Shearwater field is a high-pressure, high-temperature reservoir. It is produced through a process, utilities and quarters platform.
In 2019, Shearwater reported production of 14,000 barrels of oil equivalent per day gross.
Although BP initially planned to divest the asset to Premier Oil for $625m, the deal was scrapped in 2020 following a reverse takeover deal by Chrysaor for Premier.