Exxon prepares to unload its assets in the North Sea

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ExxonMobil plans to move ahead with its sale of some North Sea assets after months of delays, industry and banking sources told Reuters on Thursday.

The sale, which could generate up to $ 2 billion, was originally discussed in August of last year. It represents a total exit from the British North Sea for the big oil company, which has been operating in this area for more than fifty years.

But low oil prices kept the deal on the back burner for months. Now that the $ 2 billion potential is considerably lower, oil prices are trading at just over half of what they were at the start of the year. Today, Reuters sources say, the assets could be as low as $ 1 billion.

The sources said that Exxon quietly assesses interest in the assets before making any decisions about the sale.

The North Sea exodus includes Marathon Oil, ConocoPhillips and Chevron.

The sale is part of the larger Exxon divestment project, which includes asset sales worth $ 25 billion as the oil giant tries to focus on the Permian Basin and its latest hot spot, Guyana, where it has had several successes over the past year.

Low oil prices and extreme volatility in the oil markets can make it difficult for Exxon to find willing buyers at all costs, as many oil producers are cutting costs themselves.

But the sale of Exxon could be more critical than ever after recording its first quarterly loss in more than 30 years in the first quarter of 2020, when it recorded a loss of $ 610 million, against a profit of 2, $ 4 billion in the first quarter of 2019.

Analysts have criticized the oil major in recent years for paying too much for XTO Energy, for being ousted from the Russian Arctic and for abandoning the Canadian oil sands adventure.

By Julianne Geiger for Oilprice.com

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