Private companies’ share of UK oil and gas production reached nearly a third last year — up from just 8 per cent a decade ago as a new breed of players, often backed by deep-pocketed private equity funds, continues to scoop up North Sea assets from retreating majors and utilities. A recovery in the oil price has triggered $2.5bn worth of deals in the UK North Sea since January in a further “changing of the guard” that began after the oil price crash of 2014.
The influence of private equity-backed producers and other acquisitive private companies, such as Ineos, in the half-a-century old region has surged in recent years. Their collective share of production reached 30 per cent in 2020 versus 8 percent in 2010 and 13 percent in 2014, according to data from Rystad Energy, although one of the largest private equity-backed vehicles, Chrysaor, started trading on the London Stock Exchange this month under a new name, Harbour Energy.
Newer players have seen an opportunity to reduce costs and squeeze out more oil and gas from assets that were previously unloved by the majors and utilities, which have pulled back from the North Sea or exited entirely to focus on lower-cost regions, or to end fossil fuel production.