SSE sheds North Sea fields to focus on renewables

by 31, Dec, 2020Uncategorized0 comments

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”.

December 2020