Oil and gas companies currently have assets for sale around the world with recoverable reserves of more than 5 billion barrels of liquids and 7.5 billion barrels of oil equivalent (boe) of natural gas, Rystad Energy estimates. While some of these planned divestments were announced before the Covid-19-related oil price crash, more were added in reaction to the pandemic and its aftermath.
The majority of resources on offer are in the producing phase, followed by volumes of undeveloped resources in the pre-front-end engineering and design (pre-FEED) stage. In other words, companies are either getting rid of their mature portfolio to focus on key projects or want to avoid additional greenfield costs in light of the current low crude price, Rystad Energy said.
“Many players are trying to divest their low-priority assets, while others are considering this the right time to break into the industry or expand their portfolios by acquiring these assets at a lower price,“ says Rystad Energy’s senior upstream analyst Siva Prasad.
The majors contribute nearly 70% of the liquid volumes and 50% of the gas reserves lined up for divestment globally. ExxonMobil and Chevron are the most active when it comes to divestments among the majors, as both companies seek to meet their respective divestment targets.
Rystad Energy said ExxonMobil is looking for interested buyers for upstream assets in the US Gulf of Mexico, the UK North Sea, Germany, Nigeria, Malaysia, Indonesia, Romania, Azerbaijan, Vietnam, Chad and Equatorial Guinea as part of its wider plan to generate $15 billion by 2021 and $25 billion by 2025 from divestments.
Meanwhile, Chevron is seeking to divest its equity in eight Nigerian blocks, both onshore and in shallow waters, as part of a global drive to reshape its portfolio. The American major is also considering selling its stake in the Indonesian Deepwater Development gas project as part of its strategy to sell its low-priority natural gas projects to control costs in the long term.
Total’s 12.5% stake in the Nigerian offshore block OML 118, which includes the Bonga, Bonga Southwest and Aparo fields, is also up for sale as part of the French major’s bid to raise $5 billion from asset sales around the world by 2020.
According to Rystad Energy, the most prominent onshore package in its list of farm-in opportunities is the Kenyan portfolio being offered by Total and Tullow Oil.
An estimated 104,000 square kilometers of exploration acreage are up for grabs with potential exploration license sales being part of the asset packages marketed by majors, E&Ps, industrial companies, and integrated companies alike.
This is equivalent to just under 4 times the size of Guyana’s Stabroek Block where ExxonMobil has made a record 16 discoveries amounting to more than 8 billion barrels of oil equivalent resources.
Rystad Energy said about 83% of the exploration acreage available for farm-in is offshore.