Oil giants Shell and Equinor have announced plans to combine their British offshore oil and gas assets into a new, jointly owned energy company.

The venture, headquartered in Aberdeen, Scotland, aims to bolster the UK’s energy security by sustaining fossil fuel production, with the companies expecting the deal to be finalized by the end of 2025, subject to regulatory approvals.

Once operational, the new company is poised to become the UK North Sea’s largest independent oil producer, with an estimated output of over 140,000 barrels of oil equivalent per day in 2025.

Shell shares fell 0.8% in early London trading, while Equinor’s stock rose 0.3%.

“Domestically produced oil and gas will remain crucial to the UK’s energy future,” said Zoë Yujnovich, Shell’s integrated gas and upstream director. 

“This new venture will contribute significantly to a balanced energy transition, providing heat for homes, power for industry, and reliable fuel supplies.”

The joint venture will encompass Equinor’s stakes in the Mariner, Rosebank, and Buzzard fields, along with Shell’s holdings in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion.

Equinor employs around 300 people in the UK, while Shell has approximately 1,000 oil and gas workers nationwide.

Philippe Mathieu, Equinor’s executive vice president for exploration and production international, stated that the transaction “will be vital in securing the UK’s energy supply.”