Exxon to sell Norway operations to Var Energi for $4.5 billion
30 September 2019
ExxonMobil last week signed an agreement with Vår Energi AS for the sale of its non-operated upstream assets in Norway for $4.5 billion as part of its previously announced plans to divest approximately $15 billion in non-strategic assets by 2021.
The agreement includes sale of ExxonMobil’s upstream portfolio in Norway. The company will retain downstream refining operations and Esso-branded retail network in Norway.
This is part of ExxonMobil’s previously announced plans to divest $15 billion by 2021.
“Our objective is to have the strongest, most competitive upstream portfolio in the industry,” said Neil Chapman, senior vice president of ExxonMobil. “We’re achieving that by adding the best set of projects we’ve had in many years and divesting assets that have lower long-term strategic value. This sale is an important part of our divestment programme, which is on track to meet our $15 billion target by 2021.”
The transaction includes ownership interests in more than 20 producing fields operated mostly by Equinor, including Grane, Snorre, Ormen Lange, Statfjord and Fram, with a combined production of approximately 150,000 oil-equivalent barrels per day in 2019.
The transaction is expected to close in the fourth quarter of 2019, subject to standard conditions precedent, including customary approvals from regulatory authorities. The majority of the ExxonMobil employees impacted by the sale will transfer to positions at Vår Energi, the company stated.
In 2017 the company sold its ownership interests in the ExxonMobil-operated fields Balder, Jotun Ringhorne and Ringhorne East to Point Resources.
The ExxonMobil refinery in Slagen and network of approximately 250 independently owned Esso-branded retail sites are unaffected by the agreement.
In a separate statement, Var Energi, 69.6 per cent owned by Italian major Eni SpA, said the acquisition would make it the No 2 exploration and production company in the area with overall resources of 1.9 billion barrels of oil equivalent (boe).
Total production is expected to be around 300,000 boe per day in 2019 and will grow to more than 350,000 in 2023 as it invests some $7 billion in development projects.
“The acquired assets complement and strengthen Var Energi in core areas - and open up new opportunities for growth,” said Eni chief executive Claudio Descalzi.
Eni set up the unit, which is 30.4 per cent owned by Norwegian private equity HitecVision, at the end of 2018.
Var Energi said it would fund the deal with existing cash resources and a loan fully underwritten by BNP Paribas.