Shell and INEOS Energy have agreed to jointly invest in exploration and development opportunities in the U.S. Gulf of Mexico, the UK-based energy unit of chemicals giant INEOS said on Tuesday.
INEOS Energy and Shell Offshore Inc, a subsidiary of the UK-based supermajor, are thus boosting their cooperation and will be exploring for opportunities in areas in tieback distance to the Shell-operated Appomattox production hub in the Gulf of Mexico.
As a result of the strengthened cooperation, INEOS is buying a 21% working interest in these assets for an undisclosed amount, consistent with its ownership in Appomattox, Rydberg, the recent Nashville discovery, and the Mattox pipeline.
The partnership will initially focus on three exploration and production opportunities—Shell’s pre-FID Fort Sumter discovery in deepwater Gulf of Mexico, the drilling of the Sisco exploration well, and a further exploration well targeted by the end of 2030, INEOS said today.
“We are focusing on areas close to existing infrastructure where we can move quickly, control costs and unlock new production,” said David Bucknall, CEO of INEOS Energy.
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“This is disciplined growth targeting exploration, shared risk, and returns. These projects strengthen our portfolio and support long-term energy security,” the executive added.
In recent years, INEOS Energy has shifted a lot of its investments to the U.S. oil and gas sector, as it has deplored the punitive tax regime at home in the UK, which is hindering investments.
At the end of 2024, INEOS Energy announced a deal to buy the U.S. Gulf of Mexico business held by China’s CNOOC. This was the third major investment by Ineos in U.S. oil and gas, following an LNG supply deal with Sempra Energy in 2022 and the acquisition of Chesapeake Energy’s oil and gas assets in South Texas a year later.
Shell, for its part, is one of the biggest operators in the U.S. Gulf. Last year, it announced the start of production at Dover, the second subsea tieback connecting new wells to the Appomattox production hub, which it operates with a 79% working interest, with INEOS Energy controlling the remaining 21%.
By Michael Kern for Oilprice.com
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