Israeli-backed Ithaca Energy took a major holding in the North Sea this morning with a $2bn deal for Chevron, as the US oil major looks increasingly likely to pull out of the UK altogether.
The deal moves around 500 staff to Ithaca, which is owned by Tel Aviv-listed Delek, and quadruples its expected production for 2019 to 80,000 barrels of oil equivalent per day.
Read more: Oil giant exits North Sea in $2.7bn deal
It gives the company interests in ten producing fields, and increases the proven and provable reserves it holds by 150 per cent.
Chevron becomes the latest US firm to scale back in the North Sea, as they increasingly withdraw globally operations to refocus on home-grown shale.
Analysts at Wood Mackenzie said the deal made it “increasingly likely” that Chevron would completely exit from the UK, as it is left with only a 19 per cent stake in the Clair field.
Tom Ellacott, the consultancy’s senior vice president of corporate analysis, said that Chevron’s high-return US shale projects make more expensive UK fields “look more peripheral” to the oil major.
In the North Sea, US giants are facing a double incentive as the basin’s low-hanging fruit is slowly becoming depleted.
However, this has not hit production, as smaller firms and private equity have proven themselves willing to take on old wells, or drill new ones, to squeeze the remaining barrels out of the UK seabed.
Ithaca chief executive Les Thomas said: “Like our current portfolio, the production and reserves base is heavily weighted towards operated asset positions, which provides us with the ability to actively prioritise and unlock the full potential of the business.”