British power producer SSE said on Tuesday it has agreed to sell its portfolio of natural gas exploration and production assets to UK-based upstream energy company Viaro Energy for £120 million ($161-million).
The transaction is subject to regulatory approval and partner consent, the company said.
The portfolio comprises non-operational equity shares in more than 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 transaction, SSE will retain an obligation to pay 60% of the decommissioning costs, payable as the decommissioning of assets occurs, the company said.
“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,” said Gregor Alexander, finance director at SSE.
“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.”
SSE plans to refocus its investments on its networks and renewables businesses, with plans to invest £7.5 billion in low-carbon energy infrastructure over the next five years and to treble its renewable electricity output by 2030.
Last week, British power producer Drax said it would sell four combined cycle gas turbines for £164 million and focus on developing its biomass mass business using the proceeds.
Britain has legislated a target of reaching net zero emissions by the middle of the century and some companies have been trying to re-align their businesses towards renewable energy as fossil fuel prices have fallen and investors are seeking to avoid long-term exposure to them.
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