After more than one hundred years of production experience in Norway, Exxon Mobil has agreed to sell its assets for an estimated $4 billion. Exxon’s Norwegian portfolio consisted of more than twenty oil fields operated by producers Equinor and Royal Dutch Shell. In 2017, the average net production of these fields was about 170,000 barrels per day. By 2019, Exxon had controlled more than 530 million barrels of oil on the Norwegian continental shelf. Just the control that they have in the Snorre field alone is valued at around $700 million.
With new opportunities stateside in the Permian basin and off-shore Guyana, this made the decision more easier for Exxon Mobil. In recent years, Exxon has focused on growing its on shore U.S. shale production in the Permian Basin which will increase if this sale of assets is approved by regulators. Additionally, Exxon Mobil has made thirteen discoveries in off-shore Guyana alone. When the sale was reported by Reuters, Exxon’s shares rose 1.7% to a session high. Exxon hired Jeffries Investment Bank to run the sale process and there were no comment.
With Exxon being the world’s biggest publicly traded oil company, this move puts a great deal of attention for more companies to follow their lead on leaving the North Sea and to increase production in both the Permian Basin and Guyana. Exxon is also considering selling its assets in the British North Sea after 50 + years of service if the sale of the Norwegian assets is official. We look to see more off-shore drilling activity across the board in Guyana. With other oil companies, such as Tullow, having success there, Exxon’s move will spark more competition for drilling in Northeastern South America.
