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Exxon, Shell sell California oil assets for $4 billion to IKAV

Reuters

Exxon, Shell sell California oil assets for $4 billion to IKAV

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HOUSTON, Sept 1 (Reuters) – Exxon Mobil Corp (XOM.N) and Shell Plc (SHEL.L) on Thursday confirmed the sale of their California oil joint-venture Aera to German asset manager IKAV for $4 billion, ending a 25-year-long partnership that was one of the state’s largest oil producers.

The sale reflects the two companies move out of mature energy properties at a time when high oil and gas prices favor new deals. Reuters this week reported the oil giants were in advanced talks on a sale of the San Joaquin Valley property. read more

The transaction is expected to close in the fourth quarter of 2022, subject to regulatory approvals. Shell faces a $300 million to $400 million impairment charge as a result of the sale, it said.

IKAV buys assets with strong cash yields and holds them to maximize returns to its funds, according to its website. Last year, it built a solar plant in Italy and took a majority stake in Metaenergia, an Italian operator of gas-fired power plants.

Shell Upstream Director Zoe Yujnovich said the sale follows a strategy to focus “on positions with high growth potential and a strong integrated value chain”.

Both oil producers are keeping their other California operations, including gas station chains.

($1 = 1.0057 euros)

Reporting by Sabrina Valle; Additional reporting by David French in New York and Shariq Khan in Bengaluru; Editing by Josie Kao, David Gregorio and Richard Pullin
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