Page 8 - Euroil Week 36 2019

EurOil INVESTMENT EurOil
Exxon in exclusive talks with Var Energi on Norwegian sale
NORWAY
The US major wants to focus on its domestic resources.
US major ExxonMobil has confirmed enter- ing into exclusive talks to sell its Norwegian upstream assets to local player Var Energi, part- owned by Italy’s Eni.
Numerous reports this year indicated that the Texas-based producer was seeking to divest from both the Norwegian and UK o shore to focus more on high-margin domestic operations. It already o oaded some of its Norwegian busi- ness in 2018. Its remaining assets include shares in more than 20 elds, netting it 158,000 barrels of oil equivalent per day (boepd) in production last year.
ExxonMobil has held talks with a number of buyers over recent weeks, Reuters sources claimed on September 5; these included Norwe- gian players Equinor, Aker BP and DNO, Swe- den’s Lundin Petroleum, private equity group HitecVision and Var Energi. Its assets could sell for up to $4bn, according to the news agency.
On September 6, the US major con rmed to
Reuters that an exclusivity agreement had been reached with Var Energi, with a nal sales con- tract yet to be signed.
e takeover would set Var Energi up as the biggest oil and gas producer on the Norwegian Continental Shelf (NCS) a er Equinor and Nor- way’s Petoro. Formed last year when Eni’s Nor- wegian assets were merged with those of local player Point Resources, Var Energi produced 189,000 boepd of oil and gas from ve operated and 14 non-operated elds in 2018. It has pre- viously set a goal of boosting output to 250,000 boepd by the early 2020s. Eni owns a 70% stake in the enterprise.
Exxon is also looking for a buyer for its UK North Sea operations, and is reported to be seek- ing an exit from a gas project o shore Romania. In recent years it has concentrated more on building up its US shale business, especially in the Permian Basin, as well as bringing on stream large oil nds o the coast of Guyana.™
POLICY
Groningen to shut down in mid-2022
NETHERLANDS
The earlier closure
will be possible as the Netherlands will convert high-calori c gas imports into Groningen- standard low-calori c supplies.
THE Dutch government now intends to shut down the giant Groningen gas eld in mid-2022, eight years earlier than its previous goal.
Dutch Economy Minister Eric Wiebes noti- ed Parliament of the government’s intentions in a letter, which will be debated at a hearing on September 12, according to local news reports.
e Dutch State Supervision of Mines has called for the eld’s production to be capped at 12bn cubic metres in the year starting October 1. But output will drop even further to 11.8 bcm, the government said in a statement on Septem- ber 10. In the current gas year, which runs from October 1, 2018 until September 30, 2019, the production limit is 19.4 bcm.
Pressure has been mounting on the govern- ment to bring operations at Groningen to a halt earlier than the current 2030 target set last year. Operated by ExxonMobil and Royal Dutch Shell, Groningen is the largest gas eld in Europe and has been producing for more than ve decades. However, during that time activities at the site have been linked to a series of earthquakes.
“I expect the Groningen eld to no longer be necessary very soon,” Wiebes told a public radio station late last month. “ ings are moving very fast, a lot faster than anyone would have pre- dicted some time ago.”
The early shutdown is possible thanks to measures the government has undertaken, it said, including an increase in the Netherlands’ capacity to convert high-calori c imported gas to the low-calori c standard produced at Gro- ningen and consumed in the country. Industrial users are also switching to alternative fuels, it said.
Decline at Groningen led to the Netherlands becoming a net importer of gas last year. e country was previously Europe’s second biggest gas producer a er Norway, but lost that status to the UK two years ago. Much of the Netherlands’ former market share on the continent was swal- lowed up by Russia’s Gazprom.
In related news, state-owned gas grid oper- ator Gasunie Transport Services (GTS) said on September 4 it was due to assume ownership in 2021 of high-pressure networks in the Nether- lands’ south-east, including the Zebra gas pipe- line. ese networks are currently controlled by regional operators Zebra Gas, Enexis Netbeheer and Enduris.
GTS did not disclose what it had paid for these assets, but said that “a transfer of these net- works to the national grid can provide a boost for the Dutch gas market and utilisation of the national grid.” ™
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w w w . N E W S B A S E . c o m Week 36 12•September•2019