Exxon has agreed to sell the majority of its oil and gas assets in the UK North Sea to energy investment firm HitecVision for upwards of US$1bn.
The sale, made to Hitec’s wholly-owned UK subsidiary NEO Energy, comprises ownership interests in 14 offshore fields in the central and northern stretches of the UK North Sea, as well as associated infrastructure.
In 2019, Exxon’s share of the production from these assets was roughly 38,000 barrels of oil equivalent per day. European majors Shell and Total also have ownership interests in the projects.
The value of the deal may increase by around US$300m, contingent on any rise in commodity prices. The transaction is expected to close by the middle of 2021, subject to regulatory and third-party approvals.
The US oil giant said the deal advances its broader divestment plans as it looks to streamline its portfolio following a punishing 12 months amid the pandemic, in which it swung to a US$22.4bn full-year loss.
This included significant charges for the writedown of dry gas assets across North America and Argentina, as the company seeks to offload the ‘less strategic’ parts of its portfolio.
Once a prolific location for oil and gas production, the UK North Sea is now a maturing hydrocarbon resource in steady decline, with many large operators exiting the region in favour of lower-cost opportunities.