Conoco deal gives us 'potential to chase' says Chrysaor boss

US oil firm ConocoPhillips has agreed a £2billion deal to sell its North Sea assets to Chrysaor.

It marks an exit from UK oil and gas exploration and production for Conoco after more than 50 years.

Experts said the deal would also make Chrysaor the top oil and gas producer in the North Sea during 2019, just two years after acquiring a £3bn package of assets from Shell.

More than 1,000 staff and contractors will transfer over to the private equity-backed firm once the transaction is completed later this year, however it is unclear how many will stay on following a consultation process.

The deal boosts Chrysaor’s daily production to 177,000 barrels of oil equivalent, which is expected to grow even further to more than 185,000 through new drilling programmes – meaning the firm is likely to leapfrog Total as the region’s top producer.

Some of the top assets it will get its hands on include the Britannia and J-Area hubs in the Central North Sea, along with a 7.5% non-operated stake in BP’s Clair field West of Shetland.

A host of other non-operated interests and infrastructure such as the Brent pipeline will also transfer over, while Conoco will retain its London-based commercial trading business and its interests in the Teesside oil terminal, which it operates.

Chrysaor chief executive Phil Kirk said: “It’s the deal I wanted to do and my board wanted to do. It’s great in terms of geography, the resources and the platforms. We’ve become one of the largest UK producers.

“We’ve got a really strong reserves base and this gives us a great forward plan with potential to chase around Britannia and J-Area.

“It gives us a stake in Clair which is really interesting as we build the position West of Shetland.

“I am proud of everybody in the organisation, what we’ve achieved together and what we’re going to achieve”.

Once the deal is completed, a consultation process will get underway with staff – the outcome of what that will be is not clear at this stage.

However Mr Kirk said “we are not changing anything at completion”.

Chrysaor currently employs around 750 people between its own staff and contractors.

The firm will fund the deal through existing cash resources and a £2.5billion debt facility underwritten by several banks – Bank of Montreal, BNP Paribas, DNB Bank and ING Bank.


Mr Kirk said the firm still had an “appetite” for more acquisitions but making this deal a success was the immediate focus.

He added: “The next steps are very much focused on getting this deal to completion and over the line.

“We have a lot to do with our existing portfolio and in the short term we’re focused on making this a success.”

Analysts said the deal continued a “story of incredible growth” for Chrysaor which, before its £3 billion transaction with Shell two years ago, was a relatively small player.

Romana Adamcikova, senior North Sea upstream analyst at Wood Mackenzie, said: “This deal will make Chrysaor the top producer in the UK in 2019 and keep it among the UK’s largest producers for the next few years.

“Considering the company was a relatively small producer before it acquired a batch of assets from Shell in 2017, this is a story of incredible growth.

“The deal continues a theme seen across the North Sea in recent years with regionally focused, private companies acquiring assets from larger, international players.”

The acquisition includes a stake in BP’s Clair field west of Shetland, adding to Chrysaor’s existing 10% interest in Schiehallion in the same region.

Ms Adamcikova said it wouldn’t be a surprise to see Chrysaor make further moves in that region in the future.


The deal effectively marks the end of ConocoPhillips’ North Sea oil and gas exploration.

Last year the firm announced it was seeking to sell its portfolio as it turns its attentions to US shale.

Chief executive Ryan Lance said: “We are extremely proud of the legacy we’ve built in the U.K. over the last 50 years and are pleased that Chrysaor recognises the value of this business.

“This disposition is part of our ongoing effort to hone our portfolio and focus our investments across future low cost of supply opportunities.”

Deirdre Michie, chief executive of industry body Oil and Gas UK, paid tribute to the work of the US firm.

She said: “ConocoPhillips UK has been a stalwart of the North Sea and this acquisition will help ensure that its legacy continues to be built on.

“I’d personally like to pay thanks to them for the impressive contribution they have made to this industry over many years.”

Ms Michie added that the assets changing hands was an important step for future production and maximising recovery.

“The landscape of the UK industry continues to evolve” she added.

“This diversity of players in the basin is helpful to securing a sustainable industry that delivers a domestic supply of oil and gas for decades to come.

“These changes reinforce that the North Sea continues to be an attractive investment opportunity with an exciting and long-term future. Our challenge, as we look ahead to Vision 2035, is to maintain our focus on sustaining and deepening our competitiveness across the basin.”

Other merger and acquisitions this year have included RockRose Energy striking a deal for Marathon Oil’s UK assets.

Another US firm, Chevron, announced last year that it is seeking to sell its entire portfolio in the central North Sea.

Norwegian energy giant Equinor acquired operatorship of the Rosebank project west of Shetland from Chevron.

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