ExxonMobil in talks to sell UK North Sea assets to Norway investor HitecVision

London — ExxonMobil is in talks to sell its UK North Sea assets to Norwegian investor HitecVision and its UK entity NeoEnergy, the companies said Jan. 21, after HitecVision was instrumental in ExxonMobil's exit from Norway.

In separate statements, the companies confirmed they were in "exclusive negotiations" for HitecVision/Neo to buy ExxonMobil's upstream assets in the central and northern North Sea.

If successful, talks are "expected to result in a signed sales agreement in the first quarter, with close later in the year," HitecVision said.

"There is a possibility negotiations may not conclude with an agreement," ExxonMobil said. "If an agreement is reached, we will notify our stakeholders."

ExxonMobil was one of the pioneers of UK North Sea oil production, present since 1964, mostly in a partnership with Shell at fields such as Brent, which is in the process of decommissioning.

Its UK portfolio comprises stakes in about 30 producing fields, all of them operated by other companies, for the most part Shell.

One of the largest assets is a 44.5% stake in the Shearwater field, which Shell is redeveloping as a gas infrastructure hub.

Production in the core North Sea has been declining since the turn of the millennium, and ExxonMobil has not ventured into more prolific deepwater projects in the West of Shetland area.

In 2019, ExxonMobil derived 23,000 b/d of oil and 202 MMcf/d of gas from its UK assets.

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Neo already bought a handful of assets from Total last year, considered non-core by the French major, and has said it is aiming for production of 100,000 b/d of oil equivalent in 2022.

The sale continues a trend of US companies withdrawing from the North Sea to prioritize more prolific regions or US shale.

In 2019, ExxonMobil sold its Norwegian assets to Var Energi, which is 30%-owned by HitecVision and 70% by Italy's Eni.

In the same year, Ithaca Energy, a subsidiary of Israel's Delek, bought Chevron's UK assets, leaving upstream company ConocoPhillips as the remaining sizable US investor in the North Sea.

The last year has seen several North Sea M&A deals, partly reflecting the financial difficulties of some incumbents, with the creation of Harbour Energy out of Chrysaor and Premier Oil expected to be completed in the current quarter, effectively creating a new, London-listed independent major.