Shell plc SHEL and Exxon Mobil Corporation XOM have called off their planned sale of U.K. North Sea natural gas assets to Viaro Energy, ending months of negotiations and regulatory engagement. The companies said the conditions required to complete the deal were ultimately not met, prompting a mutual decision to abandon the transaction despite it being fully funded.
The proposed sale, agreed in July 2024, involved one of the largest and longest-producing gas asset portfolios on the U.K. Continental Shelf. The asset was under Shell’s broader review of its Southern North Sea portfolio for consolidation and also aligned with Exxon’s strategy to further reduce its U.K. footprint.
The Collapse of the Deal
Shell said evolving commercial and market conditions prevented the completion of the transaction. Viaro Energy’s chief executive, Francesco Mazzagatti, confirmed that both sides worked closely over an extended period but were unable to satisfy all completion requirements, leading to a joint decision not to proceed.
A key factor was the prolonged review by the North Sea Transition Authority, which had requested additional information from Viaro before reaching a determination. The regulator, which now has expanded oversight of mergers and acquisitions in the North Sea, said it was still awaiting further details from the buyer when the deal was abandoned.
Strategic Importance of the Assets
The assets at the center of the deal included 11 offshore gas fields, one exploration prospect in the Southern North Sea and the onshore Bacton gas terminal on England’s east coast. Shell has previously described Bacton as being of strategic national importance, as it is the sole entry point for gas from Belgium and the Netherlands and is capable of supplying up to one-third of the U.K.’s gas demand at peak levels.
With the collapse of the sale deal, Shell will continue to operate the assets. The collapse also comes amid heightened scrutiny of Viaro’s leadership, with Mazzagatti facing criminal charges in Italy and civil forgery and fraud allegations in the U.K., all of which he has denied.
Way Ahead
Shell, currently carrying a Zacks Rank #4 (Sell), and Exxon must now consider whether to pursue alternative buyers for the portfolio. Earlier bidding rounds had narrowed potential acquirers to Viaro, Ithaca Energy and Perenco. While the immediate transaction has fallen through, the strategic value of the assets means interest in the portfolio could resurface as market and regulatory conditions evolve.
BP p.l.c. BP is another oil and gas major that is planning a sale of its stakes in the U.K. North Sea. In October 2025, BP announced the sale of its North Sea licenses, P111 and P2544, to Serica Energy for a cash consideration of $232 million. BP’s sale deal was anticipated to provide immediate gains to Serica by providing future exploration and production opportunities.
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