SSE sheds North Sea fields to focus on renewables
Scotland-based energy company SSE has agreed to sell all of its interests in its portfolio of gas exploration and production assets to Viaro Energy
SSE said that the sale was made through its subsidiary RockRose Energy for a total consideration of GBP 120 million ($164M).
The company added that the transaction was based on a ‘locked box’ economic date of 31 March 2019 and was subject to regulatory approval and partner consent.
The diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea – the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area.
As part of the transaction, SSE will retain an obligation to pay 60 per cent of the decommissioning costs, payable as the decommissioning of the assets occurs.
SSE stated for some time that its financial investment in E&P assets is a non-core activity and ultimately not aligned with its strategic focus on reaching net-zero emissions.
This sale is part of its strategy to refocus its investment on its core networks and renewables businesses, with plans to invest £7.5 billion ($10.25 billion) in low-carbon energy infrastructure over the next five years and to treble its renewable electricity output by 2030.
The company has so far secured over £1.4 billion ($1.9 billion) from the disposal of non-core assets as part of its $2.7 billion-plus disposal programme by autumn 2021.
Today’s announcement follows recent agreements to sell its share in energy-from-waste venture Multifuel Energy Limited for $1.36 billion, its non-operating stake in Walney Offshore Wind Farm for $480 million, and its equity interest in meter asset provider MapleCo for $123 million.
Gregor Alexander, finance director of SSE, said: “We have said for some time that gas exploration and production assets are inconsistent with our future ambitions and vision to be a leading energy company in a net-zero world.
“This sale clearly comes at a difficult time for the E&P sector, and the economy as a whole, but we believe it is the right move for our shareholders as we focus our resources on our core low-carbon businesses.
“It represents further progress on our strategy to dispose of non-core assets as we look to invest £7.5bn in essential low-carbon energy infrastructure over the next five years, driving the UK’s transition to a net-zero future”.