Europe's oil and gas majors are increasingly turning to joint ventures with rivals, creating a new generation of independent production companies. This strategic shift aims to balance growth with financial discipline. Key examples include Vår Energi, where Italy's Eni holds a majority stake, becoming Europe's biggest independent producer.

In the UK North Sea, Neo Next Plus, a partnership between Total Energies and Repsol, and Adura, formed by Shell and Norway's Equinor, represent the two biggest producers. Over the past decade, BP, Eni, Shell, Equinor and Total Energies have bundled assets into standalone entities named Azule, Arcius, Adura, Aker and Vår. A recent Eni and Petronas deal created Searah, which started operations in July.

Industry experts label these "Smash Cos" as companies are essentially merged together. These ventures operate independently, raise their own debt and are not consolidated on parent balance sheets. Searah is expected to produce 300,000 barrels of oil equivalent per day, while Vår Energi announced 450,000 boe/d.

The trend allows majors to maintain reserve booking while satisfying investor demands for fiscal discipline during the energy transition.