TotalEnergies said on Monday it will merge its oil and gas assets in the British North Sea with a partnership between Spain’s Repsol and HitecVision.
The deal continues a trend in recent years by European oil majors to combine assets in Britain’s North Sea, following Shell and Equinor’s merger in December 2024 and Ithaca Energy’s purchase of Italian Eni’s North Sea oil and gas producing assets.
Total will own a 47.5 per cent stake in the partnership, now called NEO Next and which will be renamed NEO Next+, while Repsol will have 23.625 per cent in the venture and HitecVision will hold the remaining 28.875 per cent.
NEO Next+ would have production of more than 250,000 barrels of oil equivalent a day in 2026, the statement said, bigger than Shell and Equinor’s Adura venture. The new unit will include the oil and gas fields Elgin/Franklin, Penguins, Mariner, Shearwater, Culzean, Alwyn North and Dunbar.
The British Government imposed a windfall tax in the wake of a 2022 surge in energy prices, which will run until 2030 and be replaced by a new tax mechanism that kicks in amid high oil and gas prices.
Companies can offset some of their UK tax bills against previous losses, an incentive for mergers to maximise this benefit.
"While companies will be pushing for greater operating efficiencies and reduced costs, one of the key losers here is (British tax revenue and customs), with the combined entities likely to pay less tax to the UK government than they would do separately," analysts at RBC said.
The deal is expected to be finalised during the first half of 2026, subject to regulatory conditions, the companies said. The tie-up comes nine months after the merger between Repsol and NEO Energy.
(Reporting by Mireia Merino, Forrest Crellin, Alban Kacher and Shadia Nasralla; editing by Inti Landauro and Susan Fenton)
