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Recession Fears Take Hold Of Oil Markets

Recession Fears Take Hold Of Oil Markets

Oil prices have fallen back…

Chevron To Sell Off $5 Billion In Asian Assets

Chevron’s latest efforts to raise funds will include selling off $5 billion in Asian assets involved in upstream operations, according to anonymous sources cited by The Wall Street Journal.

The sale will begin next month, setting off divestment strategy in Asia for the California-based international energy major.

The company has been looking to raise $10 billion total through global asset sales in order to adjust to the chronically low oil prices.

Chevron plans to let go of its stake in a joint offshore venture with the state-owned company Cnooc Ltd. for $1 billion, sources close to the situation said, adding that the project would likely attract bidders from the region.

In Indonesia, Chevron has been marketing the sale of its geothermal energy projects worth over $2 billion and in Thailand, the company plans to dump its natural gas fields.

Natural gas fields in Bangladesh and China as well as offshore ventures in Indonesia will continue operation and preserve Chevron’s reduced footprint in Asia.

Though Chevron’s official spokesman declined to comment on the planed transactions, the company released a statement saying its “strong portfolio of projects and robust strategic position in the Asia-Pacific region ensures we are well-placed to deliver on our business plans, grow profitably in core areas, and build new legacy positions in the region.”

The American company reported $1.5 billion in losses in the second quarter of 2016, though the decline proved to be less than analysts had anticipated, according to the WSJ.

Commenting on the results, CEO John Watson said, “The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world. In our upstream business, we recorded impairment and other charges on certain assets where revenue from expected oil and gas production is expected to be insufficient to recover costs. Our downstream business continued to perform well.”

Chevron will also be firing 8,000 workers, or around 12 percent of its entire workforce, in compliance with company-wide budget cuts.

By Zainab Calcuttawala for Oilprice.com

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