TotalEnergies is set to become the leading shareholder in the UK’s largest independent oil and gas producer, following an agreement to merge its entire Upstream business in the country with NEO NEXT Energy Limited. The newly expanded entity, to be renamed NEO NEXT+, is projected to achieve a daily production exceeding 250,000 barrels of oil equivalent (boe/d) by 2026.
The landmark deal will see TotalEnergies hold a 47.5% stake in NEO NEXT+. HitecVision, a private equity investor, will control 28.875%, while Repsol UK will retain a 23.625% interest. The transaction is currently subject to regulatory approval and is anticipated to be finalised in the first half of 2026.
Strategic Imperative in a Mature Basin
This strategic consolidation aims to enhance the UK’s energy supply, maximise the value of the combined portfolio, and ensure a sustainable future for oil and gas operations in the North Sea.
TotalEnergies’ Chairman and CEO, Patrick Pouyanné, underscored the significance of the agreement, stating: “This transaction demonstrates the long-lasting commitment of TotalEnergies towards the UK oil and gas sector and its energy security.”
He further highlighted the company’s “recognised track record as a leading operator in the UK North Sea, where we have been present for more than 60 years,” emphasising a “consistent focus on running low-cost and low-emissions operations” to drive economies of scale and improve cash flow.
The merged portfolio will encompass a substantial and diverse array of North Sea assets, including significant interests in the Elgin/Franklin complex, Penguins, Mariner, Shearwater, Culzean, Alwyn North, and Dunbar fields. TotalEnergies currently operates approximately 27% of the UK Continental Shelf’s (UKCS) gas production and recorded an average daily equity production of 121,000 boe/d in 2024.
This latest merger follows a period of heightened scrutiny and policy changes within the UK’s energy sector, including the introduction of a windfall tax on oil and gas profits in 2022. Operators in the North Sea have also committed to ambitious targets to reduce upstream emissions by 25% by 2027 and 50% by 2030, against a 2018 baseline, as part of the North Sea Transition Deal.
Decommissioning Liabilities and Previous Consolidations
A notable aspect of the deal involves TotalEnergies retaining up to $2.3 billion in decommissioning liabilities associated with its legacy assets.
