ExxonMobil set for UK North Sea exit

Aug. 13, 2019

Offshore staff

LONDONExxonMobil has reportedly decided to sell its entire UK North Sea interests.

According to Neivan Boroujerdi, principal analyst, North Sea upstream at Wood Mackenzie, the potential value of the portfolio is around $2 billion.

“Combined with its Norwegian assets, which ExxonMobil recently announced its intention to market, could see the supermajor reach one-third of the way to meeting its $15 billion divestment target,” he said.

The company is looking to focus resources more on its flagship projects such as those offshore Guyana, US tight oil, and LNG.

“Nevertheless, the UK business is attractive,” Boroujerdi said. “It is highly cash generative, with operating costs around half of the UK average.

“Most of the value lies in three main hubs: Penguins, Shearwater, and Gannet. Focus for any new buyer will be on increasing recovery and pushing out abandonment costs.

“But given the portfolio is operated through a 50-50 joint venture with Shell, investment plans will need to be aligned with the Anglo-Dutch major, which is juggling opportunities in its own global portfolio.”