Exxon eyes exit from UK’s North Sea: Sources

LONDON: Exxon Mobil is considering a sale of its assets in the British North Sea after more than 50 years in the oil and gas basin as it focuses on US shale production and new projects. The world’s largest publicly traded energy company has held talks with a number of North Sea operators in recent weeks to gauge interest in some or all of its assets, which could fetch up to $2 billion, according to three industry sources with knowledge of the matter. Exxon declined to comment.

Leaving the British North Sea would mark a major retreat from Europe for Irving, Texasheadquartered Exxon, which has already put its Norwegian offshore assets on the block. It would follow similar moves by US rivals Chevron and ConocoPhillips which earlier this year sold the bulk of their North Sea operations.

Most of Exxon’s operations are managed through a 5050 joint venture with Royal Dutch Shell, known as Esso Exploration and Production UK, and include interests in nearly 40 oil and gas fields. Shell declined to comment.

Exxon produces around 80,000 barrels of oil and 441 million cubic feet of gas a day in the British North Sea, according to its website. Potential buyers could include large private equitybacked North Sea producers such as Chrysaor or Neptune which have acquired portfolios from veteran producers in recent years. Assigning a value to oil and gas assets in the North Sea is complicated because many fields and infrastructure are nearing the end of their lives and require dismantling, or decommissioning, an expensive process which can offset years of production revenue. Neivan Boroujerdi, North Sea analyst at consultancy Wood Mackenzie, said an Exxon exit was expected, valuing it at around $2 billion.

“Combined with its Norwegian assets, which ExxonMobil recently announced its intention to market, could see the supermajor reach one-third of the way to meeting its $15 billion divestment target,” Boroujerdi said. – Reuters