22 C
Georgetown
Friday, June 18, 2021

Sale of Asia Pacific assets will see ExxonMobil raising $5B

Must Read

Orinduik explorers just months away from selecting new ‘light oil’ drill targets

Following the completion of desktop work to reprocess seismic data, explorers at Guyana’s Orinduik Block will move to identify...

Guyana can become key player on global oil market with increased production – API’s Chief Economist

With Guyana expected to produce more than 800,000 barrels of oil per day by 2025, experts say that the...

“We are putting science and math fluency on the fast track” – ExxonMobil Guyana

ExxonMobil has contributed $20.9M to the Volunteer Youth Corps. Inc.’s online after school programme for Science, Technology, Engineering, and...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

Wood Mackenzie has identified the five most likely disposal candidates after ExxonMobil signalled the start of its Asia Pacific divestment programme. Together, these opportunities are worth US$5 billion, and could contribute a third of the Supermajor’s global divestment target.

Having set its ambition to divest US$15 billion worth of assets by 2021, the company has confirmed in recent weeks, it will sell stakes in Peninsular Malaysia and the Bass Strait JV in Australia. ExxonMobil joins a growing list of major producers rationalising non-core positions to focus on a tighter selection of material growth opportunities and legacy assets.

“ExxonMobil holds several mature assets in Australia, Thailand and Malaysia, with large abandonment liabilities looming. The Asia Pacific portfolio also includes large-scale, but low return, and early life, but low margin, resources in Vietnam and Indonesia. Divesting these assets would result in a more focused, higher-margin portfolio, centred on Papua New Guinea (PNG) and the non-operated Gorgon LNG project,” said Wood Mackenzie research director Andrew Harwood.

The top five divestment targets include:

  • Australia – Bass Strait JV (XOM 50%, operator) and Kipper (XOM 32.5%, operator)
  • Malaysia – Gas PSC (XOM 50%, operator) and EPMI 2008 PSC (XOM, 78% operator)
  • Thailand exit – Sinphuhorm (XOM 10%) and Nam Phong (XOM 80%, operator)
  • Vietnam exit – Cai Voi Xanh (XOM 63.75%, operator)
  • Indonesia exit – Cepu (XOM 50%, operator)

Harwood added: “The growth potential of PNG and long-term, high-margin cash flow from Gorgon LNG will form the backbone of ExxonMobil’s Asia Pacific portfolio for the next decade. Disposing some or all the assets we have highlighted would allow the Major to refocus on more material growth opportunities in the region and elsewhere in the global portfolio.

“ExxonMobil’s 2020-2030 production CAGR in Asia Pacific would improve from -3% to +3% if the portfolio is concentrated on Gorgon and PNG.”

However, the bigger challenge facing ExxonMobil is availability of buyers. The majors have more than US$70 billion of assets up for sale, so there is clearly no shortage of supply for potential buyers. In addition, recent M&A activity in Asia Pacific has been dominated by a handful of regional national oil companies such as PTTEP, and local players, the likes of Medco Energi and Santos. It remains to be seen if these players still have the financial capability to support further acquisition ambitions.

“After several aborted efforts in recent years, perhaps private equity will now sense a value opportunity and make a meaningful dive into the upstream market in Asia?” Harwood said.

- Advertisement -

OilNOW TV

Latest News

Orinduik explorers just months away from selecting new ‘light oil’ drill targets

Following the completion of desktop work to reprocess seismic data, explorers at Guyana’s Orinduik Block will move to identify...

Guyana can become key player on global oil market with increased production – API’s Chief Economist

With Guyana expected to produce more than 800,000 barrels of oil per day by 2025, experts say that the country can become a key...

“We are putting science and math fluency on the fast track” – ExxonMobil Guyana

ExxonMobil has contributed $20.9M to the Volunteer Youth Corps. Inc.’s online after school programme for Science, Technology, Engineering, and Mathematics (STEM) education in Guyana....

As global upstream spending struggle to recover, Guyana offshore continues to grow

In just two years, the damning effects of the COVID-19 pandemic have affected upstream investments by a whopping US$285 billion. Due to these significant...

Another S/American country looking to increase oil & gas investments, speed up production

Countries across the Latin America and Caribbean region have been increasingly pursuing measures that would enhance the competitiveness of their oil and gas sector...

More Articles Like This