Exxon Mobil Corp. is considering selling noncore upstream assets in Malaysia as part of its wider program to divest $15 billion of assets by 2021, Bloomberg reported Oct. 9, citing several sources familiar with the matter.
The U.S. supermajor is reportedly working with an adviser to feel out potential buyers for the assets, which could be worth $2 billion to $3 billion, the article said.
Exxon produces oil and natural gas in Malaysia under four production-sharing contracts with state-owned Petroliam Nasional Bhd., or Petronas, accounting for about one-fifth of the nation's oil output and about one-half of natural gas supplies to Peninsular Malaysia, according to Exxon.
Exxon's upstream assets in Australia, Indonesia, Malaysia, Thailand and Vietnam could be worth as much as $5 billion, Wood Mackenzie said in an Oct. 7 note to clients. Exxon holds a 10% stake in Sinphuhorm and an 80% operating interest in Nam Phong in Thailand, a 63.7% operating stake in Cai Voi Xanh in Vietnam, and a 50% interest in Cepu in Indonesia, the analysts said.
However, finding buyers could prove to be difficult, analysts have said. The most recent M&A activity in the Asia-Pacific region involved regional companies such as PTT Exploration and Production PCL, which purchased assets in Malaysia from Murphy Oil Corp. in July for more than $2 billion.
Exxon said in September that it will sell nonoperated upstream assets in Norway to Eni SpA subsidiary Vår Energi AS for $4.5 billion and that it planned to divest holdings in Australia, including a 50% stake in the Bass Strait joint venture and a 32.5% operating interest in the Kipper Tuna Turrum offshore project.
As Exxon looks to high grade its portfolio and shed aging, noncore holdings to focus on investments in more prolific production areas around the world, such as the U.S. Permian Basin, the company is also looking to unload assets in Nigeria, the U.S. Gulf of Mexico and the U.K., where it holds an interest in nearly 40 producing oil and gas fields, analysts from Tudor Pickering Holt & Co. said in a Sept. 27 note to clients.
