Exxon to Sell USD 25 Billion of Assets to Focus on Mega-Projects
ExxonMobil is set to sell up to USD 25 billion of oil and gas fields in Europe, Asia and Africa. The move, Exxon’s biggest asset sales for decades, is aimed at collecting sufficient investment to focus entirely on a few mega-projects.
The sell-off would be a marked acceleration of the U.S. oil major’s previous divestment plans. It would represent an ambitious attempt by Chief Executive Darren Woods. Many of its competitors have already sold billions of dollars-worth of assets following the market crash back in 2014.
Exxon’s shares have underperformed its major rivals’ in recent years. The disposals would help the company increase spending on new developments and appease investors unhappy with weak cash generation and oil output, which flatlined under Woods’ predecessor Rex Tillerson.
In recent months, the Texas-based company has drawn up an extensive list of assets that it wants to divest, spanning at least 11 countries, the sources said.
The list, details of which have not been previously reported, would easily exceed its current divestment target which envisages it selling about USD 15 billion of assets by 2021.
While Exxon intends to increase investments in new oil and gas projects, the competitors are wary of the uncertainty in oil prices in the time to come. Investors have also started to push corporations to focus more on renewables instead.
Note that EIB has recently reached a compromise to end the financing by the EU Bank of unabated fossil fuel projects, including gas, from the end of 2021.
/Source: ENERGY industry review/
Nov. 22, 2019