Page 15 - FSUOGM Week 21

FSUOGM INVESTMENT FSUOGM
Exxon resumes search for ACG buyer
AZERBAIJAN
Exxon’s stake is likely to go for significantly less than Chevron’s did before the price collapse.
EXXONMOBIL has relaunched the sale of its stake in Azerbaijan’s largest oilfield despite a his- toric decline in oil prices, with large Asian oil and gas companies reportedly looking to capitalise on the market situation.
The company was “ testing market interest for its non-operated producing assets in Azer- baijan,” Exxon spokeswoman Julie King told Reuters in reference to the US major’s 6.8% stake in the Azeri-Chirag-Gunashli (ACG) field in the Caspian Sea, which it first tried to sell in 2018. Exxon routinely evaluated its production port- folio and “if other companies find more value in anasset,wewillsell”,sheadded.
The news agency said banking and industry sources had briefed it that the move was attract- ing interest from big Asian oil and gas players seeking to make gains on the collapse in oil prices. They have sunk in relation to the substan- tial consumption fall caused by the effects of the coronavirus (COVID-19) pandemic.
When Exxon first tried to sell its stake in the ACG field a competing sale by rival Chevron for its larger 9.8% stake in the field was taking place simultaneously. Chevron eventually sold to Hungarian oil, gas and petrochemicals group MOL for $1.57bn last year.
It was unclear how much Exxon is seeking to raise from the sale, but it is likely to be val- ued significantly less than what Chevron’s stake fetched for, since the collapse in prices this year, the sources said.
Making matters worse, ACG has had to cut its production under Azerbaijan’s OPEC+ commit- ments, weakening the project’s earnings further.
A number of Asian national oil companies, including China National Offshore Oil Corp (CNOOC), India’s ONGC, and Indonesia’s Pertamina have shown interest in the stake, according to Reuters, which quoted four uni- dentified industry and banking sources on the matter.
The sharp drop in oil prices caused Exxon to post its first quarterly loss in decades in the first three months of the year.
The attempt to sell its stake in the Azeri oil- field comes after the Texas-based company last year launched a plan to divest up to $25bn of oil and gas fields in Europe, Asia, and Africa.
Exxon and Chevron were among five US oil companies that helped create Azerbaijan’s cur- rent oil industry soon after the collapse of the Soviet Union and acquiring a stake in ACG in 1994. ™
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