Exclusive: Shell’s energy transition spurs talks to sell Norwegian operations

  • Shell, Harbor Energy held talks at the end of last year
  • Talks included Norway, Italy and some UK assets
  • Shell is shifting its focus to low-carbon renewable energy sources

LONDON, Jan 10 (Reuters) – Shell ( SHEL.L ) held talks with Harbor Energy ( HBR.L ) last year to sell its Norwegian oil and gas fields, but was unable to reach a deal due to volatile gas prices and uncertainty over the long period -term outlook, three company sources told Reuters.

London-based Shell said it will focus its oil and gas operations in nine basins around the world, sparking increasing internal competition among assets as it aims to phase out oil and gas production and increase renewable energy and low-carbon operations to reduce its greenhouse gas emissions.

The sale of Shell’s oil and gas portfolio in Norway, where it has been for more than 110 years, would mark a continued retreat from the North Sea by the world’s biggest energy companies as they focus investment on newer, more profitable basins.

Shell and Harbor Energy declined to comment.

Talks with Harbor Energy, Britain’s biggest North Sea gas producer, have reached an advanced stage in late 2022, the sources said, just as Norway consolidates its position as Europe’s biggest supplier of natural gas following Russia’s invasion of Ukraine.

Shell and ConocoPhillips ( COP.N ) are the last two major oil companies operating offshore fields in Norway, while TotalEnergies ( TTEF.PA ) only retains stakes in fields it does not operate.

The talks with Harbor Energy included Shell’s assets in Norway and its small operations in Italy and several aging assets in Britain’s North Sea, the sources said.

Shell’s new CEO Wael Sawan, who succeeded Ben van Beurden on Jan. 1 after his nine-year tenure, is not currently reviewing the assets, two of the sources said.


Harbor Energy, led by chief executive Linda Cook, is looking to expand its business beyond the UK North Sea after the government introduced a 35% windfall tax on oil and gas producers, taking the overall tax rate to 75%, one of the highest in the world.

Shell’s hopes to expand its oil and gas production in Norway suffered a blow last year after partners in its Linnorm gas discovery could not agree on developing it as a stand-alone field, sources said. It is also a partner in the Ormen Lange Phase 3 project, the second largest gas field in the country.

British rival BP ( BP.L ) holds a minority stake in independent oil and gas company Aker BP, Norway’s second-biggest producer, while both Exxon Mobil ( XOM.N ) and Chevron ( CVX.N ) have fully sold their offshore assets in Norway in 2019 and 2018 respectively.

In addition to oil and gas, Shell is involved in several large renewable energy and low carbon projects in Norway, including offshore wind blocks, a biofuels plant and the Northern Lights carbon storage and utilization project.

Shell’s annual report shows it had interests in 21 Norwegian oil and gas production licenses at the end of 2021, including a 17.8% interest in Ormen Lange, a 45% interest in the Knarr field and an 8.1% interest in the Troll oil field.

It produced about 13,400 barrels of oil per day (bpd) and 490 million standard cubic feet per day (scf/d) in Norway in 2021, about 7% of the company’s total gas production.

Reporting by Ron Bousso; Edited by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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