Chevron to become second firm to pull out of North Sea exploration

Captain is one of the assets being sold

Chevron is set to become the second major oil firm in six weeks to pull out of exploration and production in the North Sea after agreeing the sale of its assets for $2bn (£1.58bn).

The deal with Israeli-owned oil firm Ithaca Energy will involve the transfer of about 500 employees, 200 of whom are based offshore.

Ithaca said it saw "exciting growth opportunities" in the North Sea.

ConocoPhillips sold its assets in the North Sea last month.

The Chevron deal with Ithaca Energy is subject to the approval of the Oil and Gas Authority (OGA).

The Captain field lies north east of Aberdeen

Chevron - the second largest US oil producer after Exxon - was among the first oil companies to drill in the North Sea in the 1960s.

The sale fits a trend of smaller operators taking over from the oil majors in exploiting remaining North Sea reserves.

Chevron has been focusing increasingly on shale extraction in the US and in Kazakhstan.

'Underlines our belief'

The company said the sale of its UK Central North Sea business includes Alba, Alder, Britannia, Captain, Elgin/Franklin, Erskine, and Jade.

Chevron said it would retain its "non-operated interest" in the Clair field, west of Shetland, and its UK Global Technology Centre would remain based in Aberdeen and London.

Ithaca chief executive Les Thomas said: "The acquisition of CNSL (Chevron North Sea Ltd) is a significant step forward in the long-term development of Ithaca Energy and underlines our belief in the North Sea, particular in the UK Central North Sea where the enlarged business will own a range of interests in a number of key producing assets."

The ConocoPhillips deal last month saw the company pulling out of UK exploration and production after selling its North Sea oil and gas assets to Chrysaor for $2.68bn (£2bn).