Exxon looks to divest UK, German upstream assets

Dinesh Nair and Laura Hurst January 23, 2020

LONDON (Bloomberg) - Exxon Mobil plans to start gauging buyer interest in its UK and German upstream operations in the coming weeks as the oil major continues to divest overseas assets, people with knowledge of the matter said.

The energy giant aims to start a sale process for its UK North Sea assets imminently, according to the people. It would then begin marketing its oil and natural gas assets in Germany to potential acquirers shortly afterward, the people said, asking not to be identified because the information is private. The two disposals could fetch more than $2 billion combined, they said.

Big U.S. oil companies have been selling assets as they seek to focus efforts on their home market. Exxon exited Norway last year when it sold its oil and natural gas fields in the country to Var Energi AS for $4.5 billion. It has also been considering a sale of its offshore oil fields in Malaysia, which could fetch as much as $3 billion, Bloomberg News reported in October.

Exxon has been working with investment bank Jefferies Financial Group Inc. to consider options for its UK North Sea assets. Its UK offshore operations are mainly managed through a 50-50 joint venture with Royal Dutch Shell Plc.

The U.S. major is responsible for about 5% of the UK’s oil and gas production, supplying an average of 80,000 barrels of oil and 441 million cubic feet of gas a day, its website shows. In 2018, Exxon’s German assets produced about 45,000 barrels of oil equivalent a day, according to a company operating review.

Deliberations are at an early stage, and no final decisions have been made, the people said. Exxon could still decide to keep some of the assets, the people said.

A representative for Exxon said the company continually reviews its assets for contributions toward its financial objectives as well as their potential value to others. The company declined to comment on specific transactions.

Exxon said in November that the company’s $15 billion divestment program was running ahead of schedule. The company feels “really good” about the progress, its vice president of investor relations, Neil Hansen, said on a conference call at the time.