Exxon’s planned Norway exit could be biggest deal since 2006: WoodMac

Image: ExxonMobil/Instagram

Norway could see its biggest oil and gas transaction since 2006 if reports play out that ExxonMobil exits the play.

The supermajor started operating in Norway in 1893.

For several years it was one of the largest non-Norwegian oil and gas producers on the Norwegian Continental Shelf, it says, but in 2017 it sold its ownership interests in its three operated fields to Point Resources.

“ExxonMobil continues to hold ownership interests in over 20 producing oil and gas fields operated by others,” the company says.

In 2017 its net production from these fields was around 170,000 boe/d.

Analysts with Wood Mackenzie released a research note on a potential Exxon exit from Norway on Monday following reports that the U.S. supermajor is considering a sale.

“The move doesn’t come as a surprise. We recently highlighted Norway amongst a US$48 billion pool of assets from which we think ExxonMobil could meet its recently announced US$15 billion divestment target,” said Wood Mackenzie’s Neivan Boroujerdi.

“The sale has the potential to be the Norway’s biggest since Statoil’s merger with Norsk Hydro announced in 2006.”

Boroujerdi added that “While Norway is no longer core to the overall business, ExxonMobil’s position is substantial enough to receive an attractive exit price, particularly as Norway remains one of the premium M&A markets in the world.”

The portfolio is predominantly operated by Equinor, which has laid out its own plans for increased oil recovery in the coming years – so it will come with future investment opportunities, he said.

“In terms of buyers, the new wave of North Sea independents are likely to be the front runners. Although the oil-heavy portfolio could deter some buyers looking to appease the investor community before an IPO in the coming years.”

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