Exxon Mobil Corp. signed an agreement Sept. 26 with Vår Energi AS for the sale of its non-operated upstream assets in Norway for $4.5 billion as part of its previously announced plans to divest about $15 billion in non-strategic assets by 2021.
“Our objective is to have the strongest, most competitive upstream portfolio in the industry,” said Neil Chapman, senior vice president of Exxon Mobil. “We’re achieving that by adding the best set of projects we’ve had in many years and divesting assets that have lower long-term strategic value. This sale is an important part of our divestment program, which is on track to meet our $15 billion target by 2021.”
The transaction includes ownership interests in more than 20 producing fields operated mostly by Equinor, including Grane, Snorre, Ormen Lange, Statfjord and Fram, with a combined production of approximately 150,000 oil-equivalent barrels per day in 2019.
The transaction is expected to close in fourth-quarter 2019, subject to standard conditions precedent, including customary approvals from regulatory authorities. The majority of the Exxon Mobil employees impacted by the sale will transfer to positions at Vår Energi.
In 2017, the company sold its ownership interests in the Exxon Mobil-operated fields Balder, Jotun Ringhorne and Ringhorne East to Point Resources.
The Exxon Mobil refinery in Slagen and network of about 250 independently owned Esso-branded retail sites are unaffected by the agreement.
Vår Energi is owned by the integrated energy company Eni SpA and the Norway-based leading private equity investor HitecVision
Broussard previously spent four years working for Schlumberger and held a number of management positions with Baker Hughes over an 11-year period, latterly as regional operations manager for lower completions in the Gulf of Mexico.
Oil and gas companies should carefully review their contingent consideration and earnout provisions in purchase and sale agreements and be prepared for the reporting and valuation challenges that come with them.
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