HOUSTON (Reuters) – ExxonMobil and Shell (LON: RDSa ) company on Thursday confirmed the deal to transfer its California oil joint venture Aera to German asset manager IKAV for $4 billion, ending a long 25 year partnership, one of the largest oil producers in the state.
The sale reflects both companies moving out of mature energy assets at a time when high oil and gas prices are favouring new deals. Reuters reported this week that the oil major is in advanced talks to sell properties in the San Joaquin Valley. Oil and gas production. IKAV manages EUR 2.5 billion (USD 2.49 billion) and has businesses in wind, solar, geothermal and oil and gas. It operates the Colorado Natural Gas business acquired from BP (NYSE: BP) two years ago.
The transaction is expected to close 2022 in the fourth quarter, subject to regulatory approvals. Shell said that as a result of the sale, Shell will face impairment charges in the range of
to 300 US$ million.
According to its website, IKAV buys assets with high cash yields and holds them to maximize the returns of its funds. Last year, it built a solar power plant in Italy and acquired a majority stake in Italian gas-fired power plant operator Metaenergia.
ExxonMobil (NYSE: XOM), owned 48% Aera has been divesting businesses as it focuses on offshore and LNG projects in Guyana, Brazil. The deal brings it closer to its goal of selling 15 billion-dollar assets.
ExxonMobil President Liam Mallon said the sale of Aera is in line with an investment focus on “supplying low-cost oil and gas to satisfy consumers demand and create value for our shareholders” strategy. Upstream, 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 founded in 1997 and operates in eight onshore fields in central California. At 300, the company produced approximately 300, According to the statement, barrels of oil and gas per day.
Both oil producers are retaining their other California operations, including gas station chains.
($1 = 1.0057 EUR)