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TotalEnergies is set to merge its British North Sea assets with NEO NEXT Energy, a partnership of Repsol and HitecVision, creating NEO NEXT+ with TotalEnergies holding a 47.5% stake. The venture is expected to produce over 250,000 barrels of oil equivalent daily by 2026. The deal follows a trend of consolidations by European oil majors in the North Sea. Analysts have raised concerns that while operational efficiency may improve, UK tax revenues could be affected. Completion of the merger is anticipated in the first half of 2026, pending regulatory approval.
TotalEnergies has announced that it will merge its oil assets in the British North Sea with NEO NEXT Energy, a partnership formed by Spain's Repsol and HitecVision. Under the agreement, TotalEnergies will hold a 47.5% stake in the newly named NEO NEXT+, contributing its existing assets to the venture. Repsol will retain a 23.625% share, while HitecVision will hold the remaining 28.875%. Advertisement
The merged entity, NEO NEXT+, is projected to produce over 250,000 barrels of oil equivalent per day by 2026. This transaction reflects a broader trend among European oil majors to consolidate North Sea assets, following Shell's and Equinor's merger in late 2024 and Ithaca Energy's acquisition of Italian Eni's North Sea oil and gas operations.
Analysts have highlighted potential implications for UK tax revenues. In 2022, the British government introduced a windfall tax after energy prices surged. RBC analysts noted that while the merger may enhance operational efficiency and reduce costs, the combined entities could contribute less tax to the UK government compared to what they would have paid individually.
The merger is expected to be completed in the first half of 2026, subject to regulatory approvals. This move comes about nine months after Repsol's integration with NEO Energy, continuing its strategic expansion in the North Sea region.
Source Reuters
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