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

HOUSTON, Sept 1 (Reuters) – Exxon Mobil Corp (XOM.N) and Shell Plc (SHEL.L) confirmed on Thursday the sale of their California oil joint venture Aera to German asset manager IKAV for $4 billion, ending 25 years. year-long partnership that was one of the largest oil producers in the state.

The sale reflects the two companies’ departure from mature energy properties at a time when high oil and gas prices favor new transactions. Reuters reported this week that the oil giants are in advanced talks about selling the San Joaquin Valley property. Read more

The deal puts a company invested in conventional and renewable energy in charge of a living relic of early California oil and gas production. IKAV manages 2.5 billion euros ($2.49 billion) and has wind, solar, geothermal and oil and gas businesses. It operates a Colorado natural gas business acquired two years ago from BP.

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

IKAV buys assets with strong cash yields and holds them to maximize returns for its funds, according to its website. Last year, it built a solar power plant in Italy and took a majority stake in Metaenergia, an Italian operator of gas-fired power plants.

Exxon, which owned 48% of Aera, divested its business focusing on offshore projects in Guyana, Brazil and liquefied natural gas. The deal is closing in on a target sale of $15 billion in assets.

The sale of Aera is part of a strategy to focus investment “in low-cost oil and natural gas to meet consumer demand and create value for our shareholders,” said Liam Mallon, chairman. of Exxon’s Upstream Company, in a statement.

Shell Upstream director Zoe Yujnovich said the sale follows a strategy to focus “on positions with high growth potential and a strong integrated value chain”.

Aera was established in 1997 and operates eight onshore fields in central California. In 2021, the company produced about 95,000 barrels of oil and gas per day, according to the release.

Both oil producers are retaining their other California operations, including gas station chains.

($1 = 1.0057 euros)

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Reporting by Sabrina Valle; Additional reporting by David French in New York and Shariq Khan in Bengaluru; Editing by Josie Kao, David Gregorio and Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

. Exxon Shell sell of assets oil california for billion dollars IKAV

. Exxon Shell sell California oil assets billion IKAV

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