One of the world’s largest oil companies is finalizing a massive sale of its Norwegian oil and gas assets. While there have been many American energy companies that have retreated from the North Sea, opting instead to focus on the U.S. Permian Basin or other areas, ExxonMobil (NYSE: XOM) is the largest company of its kind to withdraw from the area.
The oil and gas giant stated that it was in exclusive discussions with Var, a joint venture company formed between Italian energy firm Eni and a private equity fund that focuses on North Sea investments, HitecVision.
The deal would see Var’s output double and become the second-largest operator in the North Sea, with the assets ExxonMobil would sell accounting for around 160,000 barrels of oil per day in output.
The Financial Times reported on the story on Friday, where a spokesman for Var stating that “It’s not a confirmed deal but we have entered exclusive talks.” At the moment, neither party made any reference to the possible price tag for such a deal but would easily be in the billions. One local report from a Norwegian media outlet speculated that Var could pay as much as $4.5 billion for all of Exxon’s remaining stakes in the region.
The North Sea is a peculiar region for energy companies, with many U.S. producers deciding to withdraw from the area for a number of reasons. Both ConocoPhillips and Chevron have left the region, scaling back multibillion-dollar investments to instead focus on more promising areas in America, where oil and gas output has continued to reach record highs.
Instead, this has led the North Sea to become increasingly populated with numerous small, independent, and specialized producers trying to squeeze out as much output as they can from the aging gas and oil veins.
Exxon has also been trying to get rid of its various oil and gas fields in the UK North Sea as well, although there haven’t been any confirmed buyers in this area yet. This would mark the end of the company’s history in the area, where it has been operating since the 1960’s.
In response to the news, shares of Exxon didn’t move much in response to the news, up around 0.94% over the course of Friday. The stock has slowly been giving ground over the past few months, having fallen by around 12% in comparison to six months ago.
ExxonMobil Company Profile
ExxonMobil is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2018, it produced 2.3 million barrels of liquids and 9.4 billion cubic feet of natural gas per day. At the end of 2018, reserves were 24.3 billion barrels of oil equivalent (including 4.2 billion for equity companies), 65% of which are liquids.
The company is the world’s largest refiner with a total global refining capacity of 4.7 million barrels of oil per day and one of the world’s largest manufacturers of commodity and specialty chemicals. It operates its business divisions in North and South America, Europe, the Middle East, North and sub-Saharan Africa, and the Asia-Pacific. – Warrior Trading News