French energy giant TotalEnergies has agreed to combine its UK upstream business with Neo Next Energy, a company formed from the merger of Repsol and HitecVision. The new combined entity, to be named Neo Next+, is positioned to become the leading operator and producer on the UK Continental Shelf, with an expected 2026 production exceeding 250,000 barrels of oil equivalent per day.

Ownership and Deal Structure

Upon completion in the first half of 2026, TotalEnergies will hold a 47.5% interest in Neo Next+, making it the largest shareholder. HitecVision will own 28.875% and Repsol 23.625%. As part of the agreement, TotalEnergies will retain up to $2.3 billion in decommissioning liabilities related to its legacy UK assets, while the specific financial terms of the deal were not disclosed.

TotalEnergies' UK Portfolio and Rationale

TotalEnergies' UK business, which it has been consolidating, included a diverse portfolio of assets as of March 2025. These spanned several key regions:

• The northern North Sea, including the wholly-owned Alwyn North and Dunbar fields.
• The Central Graben area, with a stake in the Elgin-Franklin complex and related fields.
• Operating stakes in the Culzean field and the Isabella discovery.
• The eastern North Sea (Quad 9 area), with interests in several fields including Gryphon, where production ended in 2024.
• The West of Shetlands area, where the company held interests in multiple fields and a gas plant but signed an agreement to dispose of all these interests in June 2024.

The company's CEO stated the deal demonstrates its commitment to the UK sector and energy security. He emphasized that TotalEnergies' operational expertise, focus on low-cost and low-emissions operations, and over 60 years of experience in the North Sea will deliver economies of scale and enhance cash flow for the new company.

Strategic Benefits for the Partners

Repsol's CEO described the merger as a strong step forward for Neo Next's strategy. He highlighted that the complementary strengths of the shareholders and a broader, balanced portfolio under greater operational control will improve competitiveness in the UK North Sea. The move aligns with a strategy to optimize the global asset portfolio towards high-margin projects to sustain business scale and enhance shareholder value in the medium and long term.

The executive chair of NEO Next added that TotalEnergies brings significant operational capabilities to the partnership, particularly in project management for high-pressure/high-temperature gas production and global offshore operations experience.