Page 16 - Euroil Week 43 2020

EurOil INVESTMENT EurOil

Suncor seeks $400mn North Sea sale

UK EMBATTLED Canadian producer Suncor next 18 months.
Energy is considering the sale of a group of oil Merger and acquisition activity in the North
Suncor is looking to sell and gas fields in the UK North Sea, Bloomberg Sea is beginning to heat up after a slow start to
its shares in the Golden has reported citing sources. the year. Many struggling firms are anxious to
Eagle Area and Buzzard Suncor may divest its 26.7% stake in the strike deals, and the market outlook is clearer
fields. 30,000 barrel per day (bpd) Golden Eagle Area – now than it was at the height of coronavirus
a share that could be worth $400mn, one source (COVID-19) lockdowns, although there is still
said. First oil at the project, operated by China’s much uncertainty.
CNOOC, came in 2014. Chrysaor Holdings struck a deal this month
Suncor is also seeking a buyer for its 40% to acquire Premier Oil, in a reverse takeover that
stake in the Equinor-operated Rosebank project will establish the UK North Sea’s largest inde-
west of Shetland, which is one of the UK’s largest pendent oil and gas producer. There are a num-
undeveloped fields. ber of other sales that could still emerge this year.
The company’s other UK assets include its ExxonMobil is looking to dispense with its
29.9% position at the Buzzard field, also oper- UK North Sea fields, and has invited bids for
ated by CNOOC. them by October 28, Reuters reported earlier.
Suncor is also looking to shed some smaller Meanwhile, CNOOC wants to offload the Scott
assets off Norway, according to Bloomberg. Sun- platform, also in UK waters.
cor’s Norwegian business comprises shares in Over in Norway, Var Energi, a joint venture
the Oda, Fenja and Beta oilfields, as well as some between Italy’s Eni and private equity firm Hitec-
licences at the exploration stage. Vision, reportedly wants to raise $1bn from the
Suncore is battling to return to profitability, sale of Jotun floating production storage and off-
after booking $3.52bn in net losses in the first loading (FPSO). Royal Dutch Shell, meanwhile,
quarter, followed by a further $614mn in the sec- is understood to be in talks to sell its Norwegian
ond. The company announced earlier this month gas business Gasnor, as part of a broader push to
it would cut up to 15% of its workforce over the divest non-core assets. ™

PERFORMANCE

BP rebounds to profit in Q3

UK BP returned to profit in the third quarter, aided compared with $6.5bn a year earlier. BP was
by a recovery in oil and gas prices and demand, also able to lower its net debt by $0.5bn over the
The company generated as well as the lack of any significant impairment quarter, to $40.4bn. It aims to reduce it further
a modest $86mn charges. But the UK major has warned of vola- to $35bn and then shift its priority to dividend
underlying profit, after tility ahead. payments.
a $6.68bn loss in the The company generated a modest underlying Speaking to investors, Auchincloss said the
previous three months. profit of $86mn in the three months ending Sep- coronavirus crisis would not slow BP’s transi-
tember 30, marking a reversal from a $6.68bn tion plans.
loss in the second quarter. But this compared “It is hard to imagine the environment being
with a $2.25bn income in Q3 2019. much more brutal than it was in the third quar-
Driving the quarter-on-quarter recovery was ter,” he said, even if the fourth quarter “is not
BP’s upstream segment, which made $878mn materially different.”
in underlying profit compared with a $8.49bn BP has unveiled the most drastic transition
loss in the previous three months. Its Q3 2019 strategy out of all of the majors, calling for a 40%
upstream income was $2.14bn. reduction in its oil and gas production by 2030
Weak fuel demand and prices led to down- and a 20-fold increase in clean energy capacity.
stream earnings slumping to $636mn from Implementing this strategy will involve
$1.41bn in the second quarter and $1.88bn a divestments, with the company target-
year ago. BP also incurred a $177mn loss from its ing $25bn in asset disposals by 2025. It has
19.75% stake in Russian oil firm Rosneft, com- already completed or agreed deals amount-
pared with a $61mn loss in the previous three ing to half of this sum. This includes the $5bn
months and an $802mn gain a year before. divestment of its petrochemicals business to
“The underlying business performance in the the UK’s Ineos, which is due to be closed by
quarter remained resilient and we made substan- the end of the year.
tial progress in strengthening our balance sheet,” BP is also aiming to save $2.5bn in annual
CFO Murray Auchincloss commented. expenses by the end of 2021, and CEO Bernard
Operating cash flow, excluding Gulf of Looney said this figure might increase as the
Mexico oil spill payments, held firm at $5.3bn, company continues its focus on cost control. ™

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