CHRYSAOR’s bold move to buy assets that account for around half Shell’s UK production for up to around £3bn was welcomed by industry leaders as a strong vote of confidence in the North Sea.

Few people outside oil and gas circles may have heard of Chrysaor. However, the company is run by an experienced team which has the won the backing of international investors for their plan to build a very big North Sea business.

The fact the team has already won encouragement from shareholders to look at more North Sea deals indicates savvy financiers believe now could be a very good time to invest in the area.

Chrysaor chief Phil Kirk said its enthusiasm partly reflects the fact production costs have been reduced significantly following the deep cost cutting completed in recent years. He noted this has involved pain for many of the people affected.

But the company also sees potential to make big finds in the North Sea, and to develop unexploited discoveries.

The deal may boost hopes there could be a large scale transfer of assets from majors to independents. These may invest in activity that would create work for the supply chain but may not pass the majors' materiality tests.

Shell has spent months trying to offload interests in some very big North Sea fields without managing to strike a deal with one of the big fish. With Chrysaor set to acquire North Sea reserves from Shell at $8.5O per barrel it may be too soon to be talking about a recovery in the area.