Exxon plans North Sea exit after 50 years

The world's largest publicly traded energy company, ExxonMobil, is looking at selling its assets in the British North Sea after over 50 years in the region as it refocuses its efforts on US shale production and other new projects.

The company has held talks with several North Sea operators in the past few weeks in order to drum up interest in its assets, which could sell for as much as $2-billion (€1.79-billion), according to a report by Reuters.

A spokesperson for ExxonMobil declined to comment on the talks.

Most of Exxon’s operations are managed through a 50-50 joint venture with Royal Dutch Shell, known as Esso Exploration and Production UK, and include interests in nearly 40 oil and gas fields.

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.

Leaving the UK North Sea would represent a major retreat from Europe for the company, which has already put its offshore Norwegian assets up for sale. 

US rivals Chevron and ConocoPhillips sold off the majority of its North Sea assets earlier this year. 

The North Sea assets have been bought up by smaller operators. Ithaca Energy purchased Chevron's assets for $2-billion earlier this year. The company is also understood to be in talks with ExxonMobil over the deal.

A month previously Chrysaor paid $2.67-billion for ConocoPhillips fields.

Putting a value on North Sea oil and gas assets is complicated because many of the fields and infrastructure are nearing he end of their lives and need to be decommissioned or dismantled.

Neivan Boroujerdi, a North Sea analyst at consultancy Wood Mackenzie, said an Exxon exit was expected to be valued 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. 

He added that Exxon’s North Sea business “is attractive. It is highly cash generative, with operating costs around half of the UK average.”

Exxon will continue to ramp up its operations in the US and in Guyana, where it is developing enormous untapped fields.

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