Source: Houston Chronicle
The Oseberg A offshore gas platform operated by Statoil ASA stands in the Oseberg North Sea oil field 140kms from Bergen, Norway, on Friday, Jan. 17, 2014. Statoil, Norway’s biggest energy company, sees the potential to keep domestic oil and gas output at today’s levels until 2025 and possibly beyond even as it tightens spending amid rising costs. Photographer: Kristian Helgesen/Bloomberg
Exxon Mobil will sell its oil and gas assets in the Norwegian North Sea for $4.5 billion to a Norway firm backed by Italy’s Eni and private equity funding.
The anticipated sale continues the exodus of the top American energy firms from more mature North Sea oil production in order to focus on U.S. shale and other international prospects. Exxon has for months indicated its interest in selling those assets.
Exxon is selling to Vår Energi, a joint venture in which Eni owns a nearly 70 percent stake. Norway’s biggest private equity firm, HitecVision, holds the remaining 30 percent.
While the sale would end Exxon’s 125-year, oil-and-gas producing history in Norway, Exxon Mobil will still keep its Norway oil refinery and its Esso-branded retail fueling stations.
The sale is part of a $15 billion divestment program that Exxon plans to complete by 2021. Exxon Mobil also is considering selling assets in the Gulf of Mexico, the United Kingdom North Sea and offshore Australia.
“Our objective is to have the strongest, most competitive upstream portfolio in the industry,” said Senior Vice President Neil Chapman. “We’re achieving that by adding the best set of projects we’ve had in many years and divesting assets that have lower long-term strategic value.”
Exxon Mobil is currently focusing most of its oil production growth on the booming Permian Basin in West Texas and New Mexico, as well as the emerging deepwater developments offshore of Guyana in South America.
As for the sale, Exxon does not operate its fields in the Norwegian North Sea, instead owning stakes in developments led by Norway’s Equinor and Royal Dutch Shell. The deal includes ownership interests in more than 20 oil and gas fields with a combined production of about 150,000 barrels of oil equivalent per day.
Vår bought Exxon’s operated assets in the Norwegian North Sea in 2017.
Other companies, including Chevron and Houston’s ConocoPhillips, have sold most of their North Sea assets of late. Even European Big Oil players like Shell and BP have sold a lot of their North Sea acreage, although those two are still active in other parts of the basin.
More private-equity backed companies like London-based Chrysaor are leading the new wave of North Sea production. Chrysaor recently bought ConocoPhillips’ assets in the region.
Exxon Mobil also is facing the challenge of the Netherlands deciding to phase out production of the Groningen gas field by mid-2022, eight years earlier than previously planned. Once Europe’s largest gas field, Groningen is a 50-50 joint venture between Exxon and Shell and its phase out will cut into both companies oil and gas production volumes.
