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ExxonMobil reportedly in talks to sell Gulf assets to Repsol
GULF OF MEXICO
ExxonMobil began the process of selling down its Gulf assets last year.
EXXONMOBIL is reportedly in talks to offload some of its assets in the US Gulf of Mexico to Spain’s Repsol. Citing three sources familiar with the matter, Reuters reported on September 9 that the talks were at an advanced stage.
ExxonMobil could sell the deepwater assets to Repsol for about $1bn, according to the sources, who noted that there was no certainty a deal would be agreed. Two of the sources said the transaction would require approval from partners in the assets, who may have preferential rights to buy the interests.
The deal comes as ExxonMobil accelerates asset sales in a bid to increase returns and fund major new projects. The super-major is aiming to generate $15bn in cash through asset sales by 2025. It began the process of selling down its Gulf assets last year, with JPMorgan Chase & Co. advising on the move.
ExxonMobil also confirmed in early Septem- ber that it had signed an exclusivity agreement with Var Energi, majority owned by Italy’s Eni,
to negotiate a possible sale of the super-major’s assets in the Norwegian North Sea for $4bn.
The number of properties that ExxonMobil could sell to Repsol in the Gulf has not been disclosed, but Reuters cited a document from late 2018 that showed the company was market- ing nine assets. These included its 50% stake in the Julia field, which it operates, as well a 9.4% interest in Heidelberg and 23% in Lucius, both of which are now operated by Occidental Petro- leum after its takeover of Anadarko Petroleum.
However, ExxonMobil remains committed to offshore operations elsewhere, including Guyana and Brazil. Earlier this month, the super-major signed a long-term agreement with SBM Off- shore covering potential future floating, pro- duction, storage and offloading (FPSO) orders.
ExxonMobil also continues to pursue aggres- sive growth in the Permian Basin, and is now the most active exploration and production company in Texas, where much of the basin is located.™
PROJECTS & COMPANIES
Cheniere, EOG strike gas supply agreement
TEXAS
The supply agreement will underpin the expansion of Cheniere’s Corpus Christi LNG project.
SUBSIDIARIES of Cheniere Energy have struck long-term gas supply agreements with shale producer EOG Resources to support the LNG exporter’s Corpus Christi liquefaction project. Under the agreements, the subsidiaries – Cor- pus Christi Liquefaction and Cheniere Corpus Christi Liquefaction Stage III – will buy gas from EOG over a 15-year period starting in early 2020. They will initially buy 140,000mn British ther- mal units (3.9mn cubic metres) per day, with the volume rising to 440,000 mmBtu (12.2mn cubic metres).
The LNG associated with 140,000 mmBtu per day of this gas supply, or roughly 850,000 tonnes per year (tpy), will be owned and mar- keted by Cheniere, with EOG receiving a price based on the Platts Japan Korea Marker (JKM) for the feedstock gas. The remaining 300,000 mmBtu (8.3mn cubic metres) per day will be sold by EOG to Cheniere at a price indexed to the Henry Hub benchmark, the companies said in a joint statement.
A portion of the transaction is subject to certain conditions, including regulatory approval and a final investment decision (FID) on Cheniere’s Corpus Christi Stage III project. The Stage III project comprises an expansion of
the Corpus Christi liquefaction terminals that would include up to seven midscale liquefaction trains with a combined production capacity of around 9.5mn tpy. The Stage III project received a positive environmental assessment from the US Federal Energy Regulatory Commission (FERC) in March this year, and Cheniere antici- pates that all remaining regulatory approvals will be in place by the end of 2019.
Corpus Christi LNG consists of two opera- tional trains, each with a capacity of 4.5mn tpy. A third 4.5mn tpy train is under development as part of the project’s second stage, and is expected to be operational in 2021.
The agreement to link some of the gas to LNG spot prices is the second such move by Cheniere, after it struck a similar deal with Apache in June. The EOG deals suggest that producers are increasingly willing to take on LNG price risk.
EOG is the second most active exploration and production firm in Texas behind Exxon- Mobil. While the company is targeting oil in the Permian Basin, it is producing growing volumes of associated natural gas output, and the deal with Cheniere will allow EOG to market some of that gas.™
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w w w . N E W S B A S E . c o m Week 37 17•September•2019