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Exxon and Shell sell California oil assets to IKAV for $4 billion

A sign is seen at an Exxon gas station in Brooklyn, New York City, USA, November 23, 2021. REUTERS/Andrew Kelly/File Photo

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HOUSTON (Reuters) – ExxonMobil (XOM.N) and Shell (SHEL.L) confirmed on Thursday that they had sold their California oil joint venture Aera to German asset manager IKAV for $4 billion. He was in one of his year-long partnerships with the state’s largest oil producer.

The sale reflects both companies’ exits from mature energy assets at a time when oil and gas prices have soared in favor of new deals. Reuters reported this week that the oil giants are in talks to sell a property in the San Joaquin Valley.read more

The deal puts a company with investments in conventional and renewable energy in charge of the living relics of California’s early oil and gas production. IKAV is €2.5 billion ($2.49 billion) under management and owns wind, solar, geothermal, oil and gas operations. The company runs his Colorado natural gas business, which he acquired from BP two years ago.

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The transaction is expected to close in the fourth quarter of 2022, subject to regulatory approvals. As a result of the sale, Shell faces impairment charges of $300 million to his $400 million, the people said.

According to IKAV’s website, IKAV purchases high-cash yield assets and holds them to maximize returns to the fund. Last year, the company acquired a majority stake in his Italian company Metaenergia, which builds solar power plants and operates gas-fired power plants in Italy.

Exxon, which owned 48% of Aera, is selling the business as it focuses on offshore and liquefied natural gas projects in Guyana and Brazil. This transaction brings us closer to our goal of selling $15 billion in assets.

The sale of Aera fits with its strategy of focusing investments “in low-cost oil and gas to meet consumer demand and create value for shareholders,” Exxon’s Upstream Company said. president Liam Mallon said in a statement.

Shell upstream director Zoe Yujnovich said the sale follows a strategy that focuses on “positions with high growth potential and strong integrated value chains.”

Aera was founded in 1997 and operates in eight onshore fields in Central California. In 2021, the company will produce about 95,000 barrels of oil and gas per day, according to a statement.

Both oil producers maintain other California businesses, including gas station chains.

($1 = 1.0057 EUR)

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Reporting by Sabrina Valle. Additional reporting by David French in New York and his Shariq Khan in Bangalore. Edited by Josie Kao, David Gregorio and Richard Pullin

Our standards: Thomson Reuters Trust Principles.

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