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Oil giant Shell has agreed a deal that could see it increase its stake in the BP-operated Schiehallion field to nearly 50%.

US-based Hess plans to sell its 15.67% stake in Schiehallion to Shell, which already has a 33% interest. Hess said the move, subject to regulatory approval, was part of its portfolio management and optimisation. Shell is not thought to be looking to take over operatorship of the field, 108 miles west of Shetland, from BP.

Schiehallion started production in 1998 and is undergoing a £3billion redevelopment programme, led by BP. A floating production, storage and offloading (FPSO) vessel which has been on the field since 1998 is to be replaced by a new one being built in South Korea. Production from the new unit is expected to start in 2016.

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