Shell and Exxon Mobil Cancel North Sea Asset Sale

Shell and Exxon Mobil have announced the cancellation of a planned sale of $500 million worth of North Sea natural gas assets to Viaro Energy. This decision comes after the companies discovered that the conditions required to complete the sale were not met.

The deal would have involved the transfer of 11 gas fields, as well as an exploration project and the onshore Bacton terminal located in Norfolk, which Shell designates as a site of strategic national importance. The cancellation follows a complex regulatory review by the North Sea Transition Authority, which had previously indicated that it required additional information before approving the transaction.

Viaro Energy had aimed to expand its footprint in the UK energy market through this acquisition. The firm was positioned to take over one of the largest producing gas asset portfolios in the North Sea, accounting for around five per cent of UK gas output. However, regulatory scrutiny over Viaro’s leadership and its financial assurances has cast uncertainty over the acquisition.

Allegations have emerged regarding the legitimacy of financial guarantees provided by Viaro as part of a past acquisition in 2020. These claims suggest that Viaro’s documentation may have contained inaccuracies, raising concerns about the company’s suitability as a buyer in the eyes of regulators.

Despite the challenges surrounding the deal, Viaro’s chief executive expressed disappointment over the mutual decision to halt proceedings, citing that in spite of being fully funded, the completion conditions could not be satisfied as commercial and market conditions evolved.

Shell will continue to manage the North Sea assets, retaining control over a significant portfolio that is vital to UK energy production and security. The decision to cancel the sale not only impacts Viaro’s growth strategy but also highlights the ongoing complexities surrounding energy investments in the UK.