EXXONMOBIL has announced the sale of some North Sea assets for $1.75 billion (£1.1bn) and claimed the hike in taxes in the Spring Budget made investing in the area less attractive.
The US supermajor is selling a package of investments in mature oil and gas fields in the northern North Sea to a leading American independent to raise funds for investment in other projects.
Last month ExxonMobil struck a deal with Russia’s Rosneft to explore in the Arctic.
The disposal covers most of the oil and gas fields that ExxonMobil operates for itself and will result in a big reduction of the amount of staff that are employed by the firm in Aberdeen.
It may be seized on by critics of the Chancellor’s decision to increase North Sea tax rates by 12.5 percentage points, who have claimed the change will lead firms to slash investment in the region.
Asked if the disposal was promoted by the tax change, a spokesman for ExxonMobil provided a statement in which it said: “As an international company we make investment decisions with a long-term, global perspective ... the recent changes to the UK tax regime impact the attractiveness of UK investments.”
But ExxonMobil added the changes “were not the primary consideration in our decision”.
The company said the proposed sale does not affect its commitment to remaining a significant investor in the UK.
The assets it is selling represent only about 10% of ExxonMobil’s daily UK equity production.
ExxonMobil said it will continue to have “significant equity participation” in over 40 UK producing fields in the North Sea – mainly through a joint venture between its Esso business and Shell.
Majors like ExxonMobil are constantly rationalising their portfolios. In 2007 Shell and ExxonMobil sold a basket of North Sea assets to TAQA.
Like other newcomers, the Middle East firm believed it could make big returns by investing in assets in the UK that have fallen out of favour with majors.
The deal represents a big vote of confidence in the North Sea by Apache, which entered the region by acquiring the Forties field in 2003 for $1.3bn from BP.
G Steven Farris, Apache’s chairman and chief executive, said: “These major legacy assets ... bring us significant remaining life, high production efficiency and quality reservoirs.”
He said the deal involves “low-risk exploitation projects” with potential to increase reserves through exploration and development work.
The portfolio includes the Beryl field, 335km north-east of Aberdeen, which has been in production more than 30 years.
Apache said it has produced approximately 161 million barrels of oil equivalent (boe) from Forties, more than the proved reserves at the time of the acquisition – and added an estimated 171 million boe in new reserves.
The assets it is acquiring had estimated reserves of 68 million boe at December 2010. They produce around 19,000 barrels of oil and natural gas liquids and 58 million cubic feet of gas daily for ExxonMobil, and will increase Apache’s North Sea UK output by 54%.
Around 260 mainly Aberdeen-based employees who work for Mobil North Sea will transfer to Apache under TUPE regulations.
ExxonMobil said it retains a substantial downstream asset base in the UK, including its ethylene plant at Mossmorran, Fife, as well as the Esso fuels and Mobil lubricants brands.
The transaction is expected to complete in late-2011.
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