Shell, Exxon face delays in exiting California oilfield
Reuters
Published Dec 08, 2022 12:07PM ET
Updated Dec 08, 2022 03:01PM ET
(Reuters) - The sale of a Shell (LON:RDSa) Plc and Exxon Mobil Corp (NYSE:XOM) oil-production joint venture in California has been pushed back to the first quarter of next year for U.S. regulatory approvals, the companies said on Thursday.
German asset manager IKAV in September agreed to pay $4 billion for Aera Energy, a Shell-Exxon business that produces nearly 25% of California's oil output. The firms have been shedding older properties to focus on more lucrative assets.
The sale, which originally was to close this month, is pending review by the Committee on Foreign Investment in the United States, which weighs national security risks of sales to foreign-owned companies. The closing is expected by the end of the first quarter next year, said Patrick Evans, a spokesperson for IKAV.
Financing has not been an issue and "IKAV is attracting strong interest from investors, and we are currently reviewing several additional market opportunities," said Evans.
Shell owns a 51.8% stake and Exxon the remainder of the 25-year-old Bakersfield, California, venture that pumped about 95,000 barrels of oil and gas per day last year. A Shell spokesperson confirmed the delay.
The two companies will split the $4 billion purchase price. Shell has said it faces a $300 million to $400 million impairment charge on the deal.
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Written By: Reuters
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