Exxon Mobil rumoured to sell oil and gas assets in Norway

Jack Unwin 6 September 2019 (Last Updated September 6th, 2019 15:25)

Global oil and gas company Exxon Mobil is rumoured to be selling its oil and gas assets in Norway to Norwegian company Vår Energi for $4bn.

Exxon Mobil rumoured to sell oil and gas assets in Norway
The ExxonMobil building in downtown Houston, US. Credit: WhisperToMe.

Global oil and gas company Exxon Mobil is rumoured to be selling its oil and gas assets in Norway to Norwegian company Vår Energi for $4bn, according to a report by Reuters. The deal would end over a century of production by Exxon in the country.

Exxon said in June 2019 that it was looking to sell its upstream portfolio in Norway, which is comprised of 20 minority stakes in oilfields which are operated by fellow Norwegian oil and gas company Equinor and Royal Dutch Shell.

Although Reuters named Vår has been named as the likely buyer, other oil and gas companies rumoured to be in discussion include Equinor, Aker BP and Lundin Petroleum. Vår, Exxon, Equinor, Aker BP and Lundin have all refused to comment.

As a result of the rumours, Exxon’s share price rose by nearly 1.5% from $69.29 to $70.27 a share on the New York Stock Exchange, giving it a market capitalisation value of £297.3bn.

By the end of 2017, Exxon were producing 170,000 barrels of oil equivalent per day and by early 2019 had 530 million barrels of oil equivalent on the Norwegian Continental Shelf.

Rystad Energy analyst Simon Sjøthun said: “The profile is mature and declining, but nevertheless sizeable in terms of current production. A portfolio generating high cash flow and with limited tax balances, given the Norwegian fiscal regime with 90% nominal tax relief on investment, will be highly attractive for any E&P company without sufficient revenue.”

Sjøthun also added that it makes sense for Exxon to refocus on its business in Guyana and in the US as it is no longer the natural owner of Norwegian assets.

Norway is not the only area in which Exxon is rumoured to be looking to sell its oil and gas assets. In August 2019 the company was reported to be selling its UK North Sea assets for an estimated $2bn (£1.6bn). Exxon has been operational in the North Sea since the 1960s and produces around 5% of the UK’s oil and gas.

According to data analytics company GlobalData, Exxon Mobil’s net income rose by nearly 6% to nearly $21bn in 2018 and has 71,000 employees worldwide.

Exxon Mobil’s share price in 2019