KEY POINTS
- TotalEnergies is merging its UK North Sea oil and gas assets with the Repsol–HitecVision partnership, creating a strengthened unit called NEO NEXT+.
- The expanded venture is set to surpass 250,000 barrels of oil equivalent per day by 2026, overtaking other recent North Sea combinations.
- The deal reflects industry efforts to cut costs, consolidate ageing fields and navigate the UK’s shifting tax regime.
TotalEnergies has agreed to fold its oil and gas interests in the British North Sea into a growing partnership between Repsol and HitecVision, drawing another line under the steady consolidation reshaping one of Europe’s oldest producing basins.
The French major confirmed the move on Monday, saying the combined operation would be housed under a new entity known as NEO NEXT, which is expected to adopt the name NEO NEXT+ once the deal clears regulatory checks.
The tie-up places TotalEnergies alongside the Spanish producer Repsol and the Norwegian private-equity investor HitecVision, both of which have spent the past several years snapping up ageing but still sizeable assets across the UK Continental Shelf.
The region, now long past its production peak, has nonetheless become an active ground for mergers as companies seek scale, lower operating costs and more advantageous tax positioning.
Deal Creates One of the Basin’s Largest Producers as Firms Seek Efficiency and Tax Synergies
The agreement mirrors deals struck previously in the basin, including the Shell–Equinor combination that formed the Adura venture last year, and Ithaca Energy’s purchase of Eni’s North Sea portfolio. TotalEnergies will hold 47.5 per cent of the expanded venture, with Repsol taking 23.625 per cent and HitecVision holding 28.875 per cent.
The companies expect daily output to climb above 250,000 barrels of oil equivalent in 2026, making the new outfit larger than the Adura joint venture, which currently dominates UK offshore production.
NEO NEXT+ will take control of a suite of long-established fields, among them Elgin–Franklin, Penguins, Mariner, Shearwater, Culzean, Alwyn North and Dunbar. Several of these assets have served as the backbone of UK offshore output since the late 1990s and early 2000s, and still carry enough reserves to sustain medium-term production.
The structure of the deal also fits neatly into the UK’s evolving tax landscape. The British government introduced a windfall levy in 2022 after the global surge in energy prices and intends to maintain the measure until the end of the decade before shifting to a fresh mechanism tied to higher commodity prices.
Operators are able to offset parts of their tax bills using legacy losses, increasing the appeal of mergers that combine balance sheets and simplify ownership structures.
Analysts at RBC said the shift towards consolidation may reduce the total tax collected from standalone operators, arguing that the drive for efficiencies will inevitably reduce the government’s take. Even so, companies have continued to view the basin as a worthwhile bet, provided that collective operations can soften rising costs and regulatory changes.
Completion of the deal is targeted for the first half of 2026, following customary approvals. It also follows the merger earlier this year between Repsol and NEO Energy, marking yet another consolidation step in a basin where production is forecast to decline sharply over the coming decade.
