NEO NEXT+ will consolidate the offshore assets of TotalEnergies and Repsol within a vehicle jointly controlled with Norwegian private equity firm HitecVision. The new entity will concentrate around 250,000 barrels of oil equivalent per day by 2026, representing nearly a quarter of total UK Continental Shelf (UKCS) production, marking a turning point in the strategy of European majors in the North Sea.
A consolidation led by HitecVision to optimise upstream portfolios
This transaction follows a strategy of aggregating mature assets initiated with the creation of NEO Energy, originally built from the acquisition of non-core assets from ExxonMobil. The subsequent addition of Repsol’s and then TotalEnergies’ UK portfolios enabled the formation of NEO NEXT+, whose ownership structure allocates 47.5% to TotalEnergies, 28.875% to HitecVision and 23.625% to Repsol.
NEO NEXT+ thus becomes a UKCS “super-independent”, reaching a scale comparable to or even exceeding the Equinor–Shell joint venture. This move aims to pool risks associated with the basin’s structural decline while maximising scale effects across the supply chain and existing infrastructure.
Reducing majors’ direct exposure to the UK fiscal regime
Following the introduction of a windfall tax on oil and gas profits, the United Kingdom applies an effective tax rate of 78%. This disincentivising regime is pushing large companies to reconsider direct exposure, favouring asset-light structures or transferring portfolios to consolidated independent vehicles.
For TotalEnergies, contributing its assets in exchange for a minority stake reduces capital intensity in the UK while retaining a lever over the local value chain. Repsol, already impacted by US sanctions on its Venezuelan operations, sees the move as a way to secure cash flows in a more stable OECD jurisdiction.
Expected effects on competition and asset governance
The emergence of NEO NEXT+ may shift market dynamics in the UK, relegating other independent operators such as Harbour Energy or Serica to second-tier status, with output below 80,000 barrels of oil equivalent per day. The North Sea Transition Authority will need to assess the impact of this consolidation on shared infrastructure access and decommissioning obligations.
Operationally, NEO NEXT+’s increased bargaining power with offshore service providers may reduce short-term costs, while also increasing suppliers’ dependence on a smaller number of dominant clients.
Financial optimisation and exit scenarios
The transaction opens several monetisation paths. HitecVision typically invests with a five to ten-year exit horizon. Building a critical mass operator enables a potential listing in London or Oslo, or a partial sale to infrastructure funds or a major not currently present in the UKCS.
TotalEnergies and Repsol maintain strategic flexibility, allowing them to adjust their stakes depending on gas price cycles or potential UK fiscal reform. This structuring avoids a disorderly exit from the basin while optimising returns on deployed capital.
