ExxonMobil is considering a sale of its assets in the British part of the North Sea after more than 50 years in the oil and gas basin as it focuses on new projects and shale production in the United States.
The world’s largest publicly traded energy company has held talks with some North Sea operators in recent weeks to gauge interest in some or all of its assets, which could fetch up to $2bn, according to three industry sources with knowledge of the matter.
ExxonMobil declined to comment.
Leaving the British North Sea would mark a major retreat from Europe for ExxonMobil, which is headquartered in Irving, Texas in the US and has already put its Norwegian offshore assets on the block.
It would follow similar moves by US rivals Chevron and ConocoPhillips, which earlier this year sold the bulk of their North Sea operations.
Most of ExxonMobil’s operations are managed through a 50-50 joint venture with Royal Dutch Shell, known as Esso Exploration and Production UK, and include interests in nearly 40 oil and gas fields.
Shell declined to comment.
ExxonMobil produces around 80,000 barrels of oil and 441 million cubic feet (12cu metres) of gas per day in the British North Sea, according to its website.
Potential buyers could include large private equity-backed North Sea producers such as Chrysaor or Neptune Energy, which have acquired portfolios from veteran producers in recent years.
Assigning a value to oil and gas assets in the North Sea is complicated because many fields – as well as many parts of the infrastructure – are nearing the end of their lives and require dismantling or decommissioning, an expensive process that can offset years of production revenue.
Neivan Boroujerdi, North Sea analyst at consultancy Wood Mackenzie, said an ExxonMobil exit was expected and valued it at around $2bn.
“Combined with its Norwegian assets, which ExxonMobil recently announced its intention to market, [this] could see the supermajor [company] reach one-third of the way to meeting its $15bn divestment target,” Boroujerdi said.
Exxon’s UK business “is attractive. It is highly cash generative, with operating costs around half of the UK average,” he added.
The North Sea has seen a revival in production in recent years due to new fields coming online and improved performance by operators following the 2014 oil price collapse.
Still, the basin’s production is expected to decline over the next decade, according to the UK Oil and Gas Authority.
Should direct discussions with potential buyers not yield a result, ExxonMobil will consider appointing an external bank to run a formal sale process, two sources noted.
It was unclear if a sale of assets would require breaking up the Esso joint venture.
Esso has been producing gas since 1968 and oil since 1976, including from the North Sea’s Brent field, which is eponymous with the global crude benchmark and is now being decommissioned.
ExxonMobil’s operational focal point in recent years has turned to the US, where it is rapidly ramping up oil production in the Permian Basin, as well as in Guyana, where it is developing large, untapped fields.
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