ExxonMobil to sell North Sea assets for over US$1B to focus on Guyana
Feb 25, 2021 News
Kaieteur News – American oil giant, ExxonMobil, disclosed yesterday that it has signed an agreement with HitecVision, through its wholly owned portfolio company, NEO Energy, for the sale of most of its non-operated upstream assets in the central and northern North Sea of the United Kingdom. The sale price of more than US$1 billion is subject to closing adjustments, and has additional upside of approximately US$300 million in contingent payments based on potential for increase in commodity prices.
On the heels of this announcement, Neil Chapman, senior vice president of ExxonMobil said, “We continue to high-grade our portfolio by divesting assets that are less strategic and focusing our investments on our advantaged projects that are among the best in the industry.” In this regard, Chapman said that the company’s most prized resources are in Guyana, the U.S. Permian Basin, and Brazil. He said too that ExxonMobil is focused on increasing earnings potential and generating strong cash flow to fund future capital investments, reduce debt and maintain a reliable dividend.
Kaieteur News understands that the agreement includes ownership interests in 14 producing fields operated primarily by Shell, including Penguins, Starling, Fram, the Gannet Cluster and Shearwater; Elgin Franklin fields operated by Total; and interests in the associated infrastructure. ExxonMobil’s share of production from these fields was approximately 38,000 oil-equivalent barrels per day in 2019.
Further to this, ExxonMobil will retain its non-operated share in upstream assets in the southern North Sea, and its share in the Shell Esso Gas And Liquids (SEGAL) infrastructure that supplies ethane to the company’s Fife ethylene plant.
The transaction is expected to close by the middle of 2021, subject to regulatory and third party approvals.
ExxonMobil was keen to note that it has operated in the U.K. for more than 135 years and continues natural gas sales, refining and chemical operations, the marketing of lubricants and petrochemicals, and the marketing of fuels through a network of more than 1,300 independently owned Esso-branded retail sites.