Offshore staff
SINGAPORE – ExxonMobil may look to sell further upstream interests in the Asia/Pacific region to help reach its global divestment target of $15 billion of assets by 2021.
In recent weeks, the company confirmed it would sell stakes in Peninsular Malaysia and the Bass Strait joint venture off southeast Australia.
As with other majors, the company wants to focus on more material growth opportunities in these regions and elsewhere.
Wood Mackenzie research director Andrew Harwood said: “ExxonMobil holds several mature assets in Australia, Thailand and Malaysia, with large abandonment liabilities looming.
“The Asia/Pacific portfolio also includes large-scale, but low return, and early-life, but low margin, resources in Vietnam and Indonesia. Divesting these assets would result in a more focused, higher-margin portfolio, centered on Papua New Guinea (PNG) and the non-operated Gorgon LNG project.”
ExxonMobil’s rid-list is thought to include:
- Australia – Bass Strait JV (XOM 50%, operator) and Kipper (XOM 32.5%, operator)
- Malaysia – Gas PSC (XOM 50%, operator) and EPMI 2008 PSC (XOM, 78% operator)
- Thailand exit – Sinphuhorm (XOM 10%) and Nam Phong (XOM 80%, operator)
- Vietnam exit – Cai Voi Xanh (XOM 63.75%, operator)
- Indonesia exit – Cepu (XOM 50%, operator)
“The growth potential of PNG and long-term, high-margin cash flow from Gorgon LNG will form the backbone of ExxonMobil’s Asia/Pacific portfolio for the next decade,” Harwood said.
“ExxonMobil’s 2020-2030 production CAGR in Asia/Pacific would improve from -3% to +3% if the portfolio is concentrated on Gorgon and PNG.”
However, finding buyers may not be easy. The majors have more than $70 billion of assets up for sale, Wood Mackenzie estimates, so there are plenty of choices available to potential buyers.
In addition, recent M&A activity in the Asia/Pacific region has been dominated by regional NOCs such as PTTEP, and local companies such as Medco Energi and Santos.
It is questionable whether they retain the financial capability for further large-scale acquisitions.
“After several aborted efforts in recent years, perhaps private equity will now sense a value opportunity and make a meaningful dive into the upstream market in Asia,” Harwood suggested.
10/07/2019
