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Chinese Oil Giant Could Buy Exxon's North Sea Assets

Sinopec and a private equity-backed company are among some half a dozen candidates to acquire Exxon’s North Sea assets that the supermajor put up for sale earlier this year.

Kuwait Foreign Petroleum Exploration, Siccar Point, and Tailwind Energy—in partnership with Mercuria—are also among the bidders, Bloomberg reports, citing unnamed sources familiar with the matter.

Reports of the planned sale emerged in June, but the first mention of Exxon’s plans to exit the legacy oil producing region surfaced in August 2019. In that, the U.S. supermajor followed in the footsteps of other large oil companies from the States, while European majors have stayed on. For Exxon, the sale follows a wider exit from Europe, that also saw it leave Norway, after selling its asset there for $4.5 billion to Var Energi.

Exxon’s plans got delayed by oil prices but this year, after benchmarks crashed to the lowest in years, it likely decided to cut its losses. A sale of all its assets in the North Sea in 2019 was estimated to bring in as much as $2 billion but now that the oil demand outlook has grimed considerably, the price tag may be lower. There was no mention of price or value in the Bloomberg report.

According to it, Exxon would be selling stakes in 15 fields, which would this year contribute a combined 37,000 bpd to the company’s total output. Two exploration blocks and Exxon’s stakes in pipeline networks in the region are also on the table. Binding bids are due next month and the sale is seen getting finalized in the first quarter of next year.

The number of bidders is a positive surprise: earlier this year, when media first reported about the planned sale, there were doubts Exxon would find buyers given the market environment and the outlook for the industry. Yet the North Sea appears to maintain a stable interest among some sector players on the lookout for bargains.

By Irina Slav for Oilprice.com

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