Page 5 - Euroil Week 39 2019

EurOil COMMENTARY EurOil
Exxon agrees Norwegian sale
Exxon has been working on the Norwegian shelf for more than a century
NORWAY
WHAT:
Exxon has sold its remaining Norwegian assets to Var Enerji for $4.5bn.
WHY:
The US major is refocusing on higher- margin plays.
WHAT NEXT:
The transaction positions Var Enerji as Norway’s second-biggest producer.
EXXONMOBIL has agreed to sell its shares in more than 20 producing oil and gas fields off Norway to Eni-controlled Var Energi for $4.5bn.
The move draws a line under more than a century of the US major working on the Nor- wegian Continental Shelf (NCS). It comes as ExxonMobil pushes ahead with a $15bn divest- ment programme, as it looks to double down on high-margin oil plays in US shale formations and off the coast of Brazil and Guyana.
“Our objective is to have the strongest, most competitive upstream portfolio in the industry,” Exxon’s senior vice-president, Neil Chapman, said while announcing the sale. “We’re achiev- ing that by adding the best set of projects we’ve had in many years and divesting assets that have lower long-term strategic value.”
Among the assets being sold are the Grane, Snorre, Orman Lange, Statfjord and Fram fields. Combined, they produce at a rate of 150,000 barrels of oil equivalent per day (boepd). The acquisition should be closed in the fourth quar- ter, following regulatory approvals, and will be backdated to January 1, 2019.
Exxon confirmed its intention to exit Nor- way back in June, completing a withdrawal that
began with the sale of the Jotun, Balder and Ringhorne assets in 2017 to independent pro- ducer Point Resources, owned by private equity firm HitecVision. HitecVision merged Point with Eni’s Norwegian operations in 2018 to form Var Energi. Eni controls 69.6% of the company, while HitecVision has 30.4%.
“The acquired assets complement and strengthen Var Energi in core areas well known to management and open up new opportu- nities for growth,” Eni CEO Claudio Descalzi said, adding that the NCS still had “tremendous potential.”
With the latest takeover, Var Energi will become the second-largest producer on the NCS after state-owned Equinor. It will boast 1.9bn boe in total reserves and resources, and its output is expected to average 300,000 boepd in 2019, rising to 350,000 boepd in 2023. Var Energi is investing $7bn in its Johan Castberg, Balder X and Grand projects over the next few years.
Var Energi will fund the purchase from its existing cash and a reserve-based lending facil- ity underwritten by BNP Paribas and due to be syndicated.
Week 39 03•October•2019 w w w . N E W S B A S E . c o m P5