Chevron is exploring the sale of some of its older oil and gas assets in the US Gulf, the company confirmed to Reuters, part of an effort to focus on high-growth developments in the region.
The energy producer is in the early stages of a multi-month process that could see a number of assets offloaded, a Chevron spokesperson said in response to questions from Reuters about the sale effort.
“We are initiating the process of marketing some of our mature Gulf of America producing assets, including Petronius, Tubular Bells, and Llano as well as working interest in several other operated and non-operated fields,” the spokesperson said.
The move is part of Chevron’s efforts to ensure its portfolio aligns with the company’s priorities, the spokesperson said, adding there was no guarantee that sales would take place.
With Chevron targeting production from the US Gulf to grow to 300,000 barrels of oil equivalent per day by the end of this year, the portfolio-trimming efforts indicate Chevron is increasingly focused on newer projects and opportunities in the region.
This would include Anchor, its first platform producing at ultra-high subsea pressure, and Ballymore, which began production last year. The company is also pursuing exploration to find oil and gas resources near existing facilities, and has been a top spender in recent sales of drilling rights in the US Gulf conducted by the Interior Department.
SHARPENING FOCUS
Market conditions are favorable for Chevron’s pruning efforts. There continues to be heightened buyer interest in American energy production, and asset valuations are supported by elevated oil prices — US crude touched a six-month high on Tuesday.
The sales will likely raise around $1 billion for the company, said two people aware of the sale effort, who spoke on condition of anonymity to discuss confidential deliberations.
Buyer interest is expected to come from international operators that specialize in offshore development and that are seeking to grow their US Gulf footprint, as well as US companies focused on the basin. Other energy majors may also show interest, the sources added.
Petronius began producing in 2000, and Tubular Bells in 2014, according to Chevron’s website. The company owns 100% of Tubular Bells, having initially held 43% but assumed the rest following its takeover of Hess. Chevron operates Petronius with Talos Energy as its partner in the platform.
Chevron’s 50% position in Llano was also inherited from Hess. Production from the play, which is operated by Shell, started in 2004.
(Reporting by David French in New York and Sheila Dang in Houston; Editing by Colin Barr and Andrea Ricci )