Wednesday, November 30, 2022

Shell, ExxonMobil to sell Aera Energy joint venture to IKAV

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Shell and ExxonMobil, joint venture partners in Aera Energy, have decided to sell the company to IKAV, an asset management firm based in Germany.

ExxonMobil Corporation disclosed Thursday that its affiliates have signed an agreement to sell all of its interests in the Aera oil-production operation in California to Green Gate Resources E, LLC, a subsidiary of IKAV.

The transaction involves a share sale of Mobil California Exploration and Producing Asset Company. In addition, ExxonMobil affiliates have entered into a separate agreement for the sale of an associated loading facility and pipeline system.

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“This sale is part of our strategy to continually strengthen our industry-leading portfolio, focusing our investments in low-cost-of-supply oil and natural gas to meet consumer demand and create value for our shareholders,” said Liam Mallon, President of ExxonMobil Upstream Company.

Mobil California Exploration and Producing Company holds a 48.2% share of Aera Energy LLC and a 50% share of Aera Energy Services Company, a joint venture with Shell. It was formed in June 1997 and has operations in eight onshore fields. In 2021, Aera produced about 95,000 oil-equivalent barrels per day.

Likewise, Shell plc said its subsidiary, Shell Offshore Inc. has agreed to sell its 100% interest in Shell Onshore Ventures LLC which holds a 51.8% membership interest in Aera Energy LLC to IKAV for a total consideration of approximately US$2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval.

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“This decision supports our strategy to create a resilient and competitive Upstream portfolio by focusing on positions with high growth potential and a strong integrated value chain,” said Zoe Yujnovich, Shell’s Upstream Director.

The sale does not affect ExxonMobil’s branded network of about 500 independently owned retail sites in California, the major said. Similarly, Shell said that while this transaction will end Shell’s Upstream position in California, it will remain active in the state through a variety of other assets and projects.

The transaction is expected to close in the fourth quarter of 2022, subject to regulatory approvals.

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