ExxonMobil plans £1.6bn sale of North Sea oil and gas stakes | Business



ExxonMobil is planning a retreat from the North Sea with a $2bn (£1.6bn) sale of its oil and gas fields after almost 50 years in the UK’s oil basin.

The world’s largest listed company is in talks with a number of North Sea oil firms to sell the stakes it owns in about 40 oil and gas fields alongside Royal Dutch Shell.

The portfolio could fetch the US oil major about $2bn, according to market sources, after a string of similar deals in the North Sea in recent months.

ExxonMobil is responsible for producing about 5% of the UK’s oil and gas through the joint venture which it formed with the Anglo-Dutch firm in the early days of North Sea oil exploration in the 1960s.

The joint portfolio – which is entirely operated by Shell – includes the prolific Brent field which first began pumping oil in the North Sea’s 1970s heyday, and lent its name to the global benchmark price for crude oil.

A spokesman for ExxonMobil declined to comment on the sale talks.

The North Sea exit would make Exxon the third major US oil company to turn its back on the UK oil basin after Chevron and ConocoPhillips beat a retreat in multibillion-dollar deals earlier this summer.

The US companies are understood to be backing out of the North Sea in favour of North American shale projects which produce a much quicker return on investment.

The North Sea fields have been snapped up by smaller North Sea minnows with deep-pocketed owners in a flurry of deals this year.

The Aberdeen-based Chrysaor agreed in April to pay $2.67bn for ConocoPhillips’s North Sea fields, in its biggest deal since snapping up Shell’s North Sea assets for $3.8bn in 2017.

A month later Chevron agreed to sell its North Sea portfolio to Israeli-owned Ithaca Energy for $2bn.

Ithaca Energy, which is backed by the Israeli energy giant Delek Group, is understood to be in talks with ExxonMobil over the latest deal too.

Ithaca is likely to face competition from the Omani oil company Petrogas, which is on the hunt for North Sea opportunities after striking a deal last month to pay more than $500m for a package of North Sea fields form the French oil major Total.

The Chevron and Conoco deals attracted the attention of Sir Jim Ratcliffe’s chemical business Ineos before the pair struck deals with the smaller suitors, according to industry sources.

As a result the billionaire industrialist could be one of the parties interested in buying Exxon’s assets to secure a steady supply of hydrocarbons for its Grangemouth refinery in Scotland.

Ineos is also understood to be eyeing the chance to buy a string of gas fields from Perenco, the Anglo-French oil and gas firm owned by the widow of the French billionaire Hubert Perrodo.

In recent years Ineos has extended its interests in the North Sea while oil majors have eyed the exits. It snapped up the Forties pipeline system which carries about 40% of the UK’s oil and gas from the North Sea to mainland processing plants.

Ineos has also bought a string of oil and gas fields to supply hydrocarbons to the Grangemouth plant, and had hoped to frack for shale gas to top up its supplies. Its ambitions to become the biggest UK’s biggest shale company has been upended by a moratorium on shale fracking in Scotland.

One industry source said: “Whoever buys Exxon’s fields will need to have deep pockets.”

The heavy cost of decommissioning the fields when they reach the end of their lives could reach $1.5bn, even with help from the government, he said.

Ithaca and Petrogas were not immediately available to comment.