SSE Sells Off North Sea Gas Fields

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--U.K. energy company SSE is selling off its gas exploration and production (E&P) assets to Viaro Energy in a deal worth £120 million ($163 million).

The sale forms part of the company's plan to divest itself of £2 billion ($2.7 billion) worth of "non-core" assets by this autumn. The money will be used to fund a £7.5 billion ($10.2 billion) investment strategy in low-carbon energy infrastructure over the next five years that will see it treble its renewable electricity output by 2030. The gas portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area. As part of the deal, SSE will be liable to pay 60% of the decommissioning costs.

So far, SSE has raised £1.4 billion ($1.9 billion) from selling assets. These include recent agreements to sell its share in energy-from-waste venture Multifuel Energy Limited for £995 million ($1.35 billion), its non-operating stake in Walney Offshore Wind Farm for £350 million ($476 million) and its equity interest in meter asset provider MapleCo for £90 million ($122 million).

"We have said for some time that gas exploration and production assets are inconsistent with our future ambitions and vision to be a leading energy company in a net-zero world," explained Gregor Alexander, SSE's finance director. "This sale clearly comes at a difficult time for the E&P sector, and the economy as a whole, but we believe it is the right move for our shareholders as we focus our resources on our core low-carbon businesses. It represents further progress on our strategy to dispose of non-core assets as we look to invest £7.5 billion in essential low-carbon energy infrastructure over the next five years, driving the U.K.'s transition to a net-zero future."

Last summer, SSE Renewables confirmed plans to proceed with the Seagreen 1 offshore windfarm. With a proposed generating capacity of 1,075 megawatts (MW), Seagreen 1 will be Scotland's largest windfarm, generating enough electricity to power 1 million homes. The £3 billion ($4.1 billion) project will be located in the Firth of Forth and is 51% owned by SSE, which sold a 49% stake in the project to new joint venture partner Total. SSE Renewables will continue to lead on the development and construction of the project, and will operate the windfarm when it is commissioned in 2022/23. Industrial Info is tracking both project phases.

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