Exxon to sell UK assets for $1 billion
Exxon Mobil plans to sell holdings in the oil fields of the United Kingdom and the northern North Sea for more than $1 billion as it continues to focus on projects delivering the highest returns.
The Irving oil major, the nation’s largest oil company, on Wednesday said it signed an agreement to sell to NEO Energy its interests in 14 oil fields operated primarily by Royal Dutch Shell, oil fields operated by French oil major Total and interests in the associated infrastructure. Exxon said the oil fields produced about 38,000 barrels of oil and natural gas per day in 2019.
NEO Energy is owned by Norway-based HitecVision.
The sale is expected to close by midyear and is subject to regulatory and third-party approvals. If oil and gas prices rise, Exxon could earn additional payments of about $300 million, the company 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,” Neil Chapman, Exxon’s senior vice president, said in a statement.
In the wake of the worst oil bust in decades, Exxon has turned its attention to developing oil and gas projects that deliver profits even at low crude prices. Such efficient projects help Exxon maintain a healthy bottom line and the hallmark of its blue chip stock: shareholder dividend. In response to the pandemic-driven oil crash, the company has announced job cuts totaling 15 percent of its global workforce, stopped contributing to employee retirement accounts and slashed operating and capital budgets.
Also Wednesday, Exxon said it will retain its stake in other oil and gas production assets in the southern North Sea as well as in the Shell Esso gas and liquids projects that supply ethane to the
company’s ethylene plant in Fife, Scotland.
Exxon, which has operated in the U.K. for more than 135 years, said it will continue its natural gas sales, refining and chemical operations, the marketing of lubricants and petrochemicals, and the marketing of fuels through its more than 1,300 independently owned Esso-branded fuel stations.