ExxonMobil's Mooted UK Asset Sale could Net $2bn: WoodMac
ExxonMobil could net in excess of $2bn from the expected sale of its UK assets but the involvement with Shell in their 50-50 Expro joint venture poses a potential difficulty, according to Wood Mackenzie. The US major wants to high-grade its portfolio and invest heavily in the US tight oil plays, LNG and offshore Guyana, while the UK is a mature basin with relatively little left to play for.
In an August 13 comment, the UK consultancy's North Sea researcher Neivan Boroujerdi said that, combined with its Norwegian assets, which it intends to market, the supermajor could reach a third of its $15bn divestment target.
He added: “In a recent report, we highlighted the UK and Norway amongst nearly $50bn worth of assets we think the company could divest.... Nevertheless, the UK business is attractive. It is highly cash generative, with operating costs around half of the UK average. Most of the value lies in three main hubs: Penguins, Shearwater and Gannet. Focus for any new buyer will be on increasing recovery and pushing out abandonment costs.
“But given the portfolio is operated through a 50-50 joint venture with Shell, investment plans will need to be aligned with the Anglo-Dutch major, which is juggling opportunities in its own global portfolio,” he concluded.
Elsewhere in northwest Europe the two are also partners in the Dutch NAM operating company, whose principal asset is the Groningen gas field. A former giant swing producer until recently, it is being wound up long before natural depletion, and the value of the sales is also declining sharply as gas supply exceeds demand in the region.
But NAM has not commented on whether it might cease production before the 2030 termination date, set by the government in response to the damage done to housing by gas extraction.