Royal Dutch Shell is reportedly planning to exit Aera Energy, its oil and gas joint venture (JV) with ExxonMobil in the US.

The British-Dutch energy giant has informed ExxonMobil about its exit plan, Reuters reported citing four people familiar with the development.

Based in the US state of California, the JV has assets primarily in the San Joaquin Valley. It has a daily production of about 125,000 barrels of oil and 32 million cubic feet of natural gas.

This accounts for about 25% of the total oil and gas production in California.

The move is said to be part of Royal Dutch Shell’s plan to shift its focus towards clean energy and reduce carbon emissions.

Recently, Reuters reported that Shell is mulling the sale of its assets in the Permian Basin of Texas, US, for more than $10bn.

Shell is among the European oil and gas firms such as BP and TotalEnergies who have committed to divest some of their oil and gas holdings to lower emissions and boost investment in renewables.

This comes in response to the increasing crude oil price, which climbed more than 50% this year as demand has rebounded as restrictions to contain the Covid-19 pandemic are lifted.

Earlier this year, Shell pledged to cut the carbon intensity of its products by at least 45% by 2035, and by 100% by 2050 compared to 2016 levels.

However, a Dutch court later ordered Shell to strengthen its carbon emissions targets by 45% by the end of 2030 compared to the 2019 level.