TotalEnergies SE (EU:TTE) has reached an agreement to combine its U.K. upstream operations with those of Repsol (TG: REP) and Hitec, forming what will become the largest independent oil and gas producer in the United Kingdom. Under the terms of the deal, TotalEnergies will take a 47.5% stake in the newly formed entity, NEO NEXT+, making it the largest shareholder. HitecVision will hold 28.875%, while Repsol will own 23.625%.

The transaction, subject to regulatory approval, is slated to close in the first half of 2026. Analysts at RBC noted that the move “reflects a continuation of the trend we’ve seen in recent years from the majors in the UK North Sea,” following Repsol’s earlier deal in March and the 2024 agreement between Shell and Equinor to merge their U.K. offshore portfolios. However, RBC also cautioned that HMRC may see diminished tax receipts, as the merged entity is expected to pay less in taxes than the companies would have individually.

The combined company is expected to produce around 250,000 barrels of oil equivalent per day in 2026, with a portfolio spanning fields such as Penguin, Mariner, Shearwater, and stakes in the Elgin/Franklin complex and Alwyn North. As part of the agreement, TotalEnergies will retain up to $2.3 billion in decommissioning liabilities tied to legacy assets, and it expects the transaction to be immediately accretive to the joint venture’s cash flow.

This deal follows March’s announcement of NEO Energy’s merger with Repsol, which similarly involved Repsol keeping $1.8 billion of funding commitments — representing 40% of decommissioning liabilities — for its legacy portfolio. Before this latest agreement, Hitec and Repsol had forecast that their joint venture would produce roughly 130,000 barrels of oil equivalent per day in 2025.

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