THE WALL STREET JOURNAL: Kerr-McGee
“The world’s oil companies are having a hard time finding oil. So how come Kerr-McGee of the U.S. is getting rid of its North Sea oil fields? And why were none of the oil majors queuing up to buy them?”: “Some, like Shell, have tied their hands with lofty production promises to shareholders.
Posted Tuesday 9 August 2005
The world’s oil companies are having a hard time finding oil. So how come Kerr-McGee of the U.S. is getting rid of its North Sea oil fields? And why were none of the oil majors queuing up to buy them? Most of the fields have been snapped up by a Danish shipping company. And it was a similar story when Exxon Mobil sold its Texas fields earlier this summer to another minnow, Occidental Petroleum.
Kerr-McGee’s auction attracted only minor players partly because the fields in question were relatively small and mature. So a large oil company wouldn’t be able to get much more out of them than a small one. This also helps explain why Kerr-McGee is selling in the first place. Furthermore, the $3.5 billion (€2.83 billion) proceeds will reduce its debt, giving it greater flexibility to invest in higher-growth opportunities, such as the Gulf of Mexico. Likewise, Exxon says it plans to recycle the proceeds from the Texan sale into higher-return projects. read more
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