Page 4 - EurOil Week 08 2021

EurOil COMMENTARY EurOil

ExxonMobil, Neo clinch

North Sea sale deal

ExxonMobil has finally clinched a deal for a package of UK North Sea assets,

after starting the search for a buyer in mid-2019

UK US major ExxonMobil has agreed to transfer a Guyana, the US Permian Basin, Brazil and LNG
package of UK North Sea assets to private equi- are focused on increasing earnings potential and
WHAT: ty-backed NEO Energy for more than $1bn, the generating strong cash flow to fund future capital
ExxonMobil has agreed to two companies announced on February 24. investments, reduce debt and maintain a reliable
sell some of its UK North The deal, due to close before mid-year, will dividend.”
Sea operations to NEO significantly downsize ExxonMobil’s North Sea Besides its southern North Sea assets, Exxon-
Energy for over $1bn. presence, although the company has retained Mobil will also retain its share in the Shell Esso
some assets in southern UK waters. Those too gas and liquids (SEGAL) transport system that
WHY: are expected to go at some point, as the US major delivers ethane to its ethylene plant in Fife, Scot-
The US major is prepares to leave the European upstream sector land, along with extensive refining, fuel market-
withdrawing from altogether within a few years, to concentrate on ing, lubricants, petrochemicals and natural gas
Europe’s upstream, high-margin plays in the US, South America and marketing activities in the UK.
while NEO and its owner other regions. The US major has been seeking a buyer since
HitecVision are plotting Among the divestments are stakes in 14 pro- mid-2019. The pandemic and the subsequent
an expansion. ducing fields operated primarily by Royal Dutch collapse in prices and asset values complicated
Shell, including Penguins, Starling, Fram, the negotiations. It was revealed that the US major
WHAT NEXT: Gannet cluster and the Shearwater fields, the was in exclusive talks with NEO last month.
The deal is due to close Total-operated Elgin-Franklin deposits and
by the middle of the year. associated infrastructure. ExxonMobil nets The buyer
In line with its strategy, almost 40,000 barrels of oil equivalent per day NEO is young company, born out of the 2019
ExxonMobil is likely to (boepd) of supply from these assets, along with merger of Verus Petroleum and NEO E&P –
sell the rest of its UK 140mn boe of reserves. both investment vehicles belonging to Norwe-
upstream assets in due “We continue to high-grade our portfolio by gian group HitecVision. It bought a group of
course. divesting assets that are less strategic and focus- Total assets in the UK North Sea last year. NEO
ing our investments on our advantaged projects produced only 26,500 boepd of oil and gas in
that are among the best in the industry,” Exx- 2020, but it expects to grow this organically to
onMobil senior vice president Neil Chapman over 80,000 boepd by 2024, thanks to devel-
said. “Our development plans that prioritise opments like Penguins. The acquisition from

P4 www. NEWSBASE .com Week 08 25•February•2021