Global Oil Giants– the so-called supermajors – are looking to sell assets that could fetch a total of $27.5 billion, according to Rystad Energy’s latest assessment.
These companies are actively shedding mature assets on a massive scale in a bid to finance higher-yielding investments elsewhere, with the added benefit of pleasing shareholders who are calling for stricter capital discipline.
U.S. giants Exxon Mobil and Chevron for instance are concentrating their oil and gas spending on West Texas’ booming Permian Basin, as well as Guyana for Exxon Mobil and Kazakhstan for Chevron, according to a new report from the Norwegian research firm Rystad Energy.
The United Kingdom’s BP aims to sell some assets in the U.S., including in New Mexico’s gassy San Juan Basin, after spending $10.5 billion to buy the Texas shale assets of BHP. Houston’s ConocoPhillips, for instance, already wants to sell its newer position in the Louisiana Austin Chalk for less than $1 billion, although other Houston firms Marathon Oil and EOG Resources are still operating in the region.
“While oil and gas majors increase their focus on core areas and divest mature assets and interests in geopolitically unstable regions, observers will be following closely to see how investors react and what other steps these energy giants will take to keep stakeholders interested amid rising climate concerns and geopolitical volatility,” said Rystad analyst Ranjan Saxena.
Rystad Energy, the independent energy research and consulting firm headquartered in Norway with offices across the globe, has taken a closer look at some of the main assets currently up for sale.
Exxon Mobil has the most for sale as it plans to divest $15 billion of assets by 2021. Exxon Mobil recently sold its Norwegian North Sea assets for $4.5 billion, but also for sale include Exxon Mobil’s position in the UK North Sea for up to $2 billion, certain Gulf of Mexico assets, as well as additional assets in Australia, Malaysia, Vietnam, Nigeria and Azerbaijan.
Chevron needs to raise capital for projects such as Tengiz in Kazakhstan, Contract 3 in Thailand and its U.S. shale positions in the Permian Basin, and it is considering a sale of Nigerian assets which could be valued at up to $2B.
Apart from its northwestern New Mexico position, BP also is interested in selling assets in the United Kingdom and Kazakhstan, while Royal Dutch Shell aims to sell its positions in Egypt and Indonesia.
Rystad says BP wants to offload some of its non-core U.S. shale assets to help fund last year’s $10.5B purchase of BHP’s North America subsidiary, and Total wants to sell a third of its 16.8% stake in the Kashagan field offshore Kazakhstan, which could attract offers of as much as $4B. Total is buying the Africa assets of Houston’s Occidental Petroleum – acquired from Oxy buying Anadarko Petroleum – for $8.8 billion, including a crown jewel liquefied natural gas project in Mozambique, so Total is looking to unload some other assets.
“The expected transactions mean some of the majors are poised to exit certain regions, giving regional players and independents a chance to buy into key fields and help keep them profitable through production-life extensions and new developments,” Saxena said.