Exxon Mobil is set to sell $25 billion worth of its oil and gas fields located in Africa, Asia, and Europe. The move entitled the greatest asset sales by Exxon Mobil in the past few decades is aimed at collecting sufficient investment to focus entirely on a few mega-projects.
The experts have construed the announcement as the next phase of Exxon’s divestment plans. Chief Executive Darren Woods seems determined to keep Exxon’s reputation as one of the largest oil and gas corporations across the globe. Many of its competitors have already sold billions of dollars worth of assets following the market crash back in 2014.
Exxon CEO Aims To Regain The Investors’ Confidence With The Sell-Off
Exxon’s performance in the stock market has been subpar in the past few years as compared to its competitors. Under the ex-CEO, Rex Tillerson, investors expressed their concerns regarding low oil output and consistently weaker cash generation. By increasing spending on the mega-projects with high prospects of profits, Woods aims at regaining the investors’ confidence.
The sell-off is expected to begin with an effective end to Exxon’s upstream business throughout Europe. The collected cash is then likely to be invested in different projects in Mozambique, Brazil, Guyana, Papua New Guinea, and the United States of America.
While the Exxon representative has highlighted that the sell-off can potentially hit the $25 billion mark by the year 2025, specifics regarding the assets on sale have not been revealed. As per the sources, however, the assets expected to be divested are located in 11 different countries. Exxon was recently reported to have struck an exit deal with Norway valued at $4.5 billion. A similar deal with Australia is also in progress.
Exxon Stock Gained 1.5% On Thursday Following The Announcement
The share prices for the American multinational oil and gas corporation were reported to have gained 1.5% on Thursday following the announcement. Other prominent territories that Exxon plans on exiting include Germany, the British North Sea, and Romania. Upon realization of the divestment plan, Exxon will only remain operational in the Netherlands in Europe. In Southeast Asian territory, assets are likely to be sold in Indonesia and Malaysia.
Equatorial Guinea, Chad, and a few of the Nigerian assets are among the resources to be laid off in Africa.
While Exxon intends to increase investments in new oil and gas projects, the competitors are wary of the uncertainty in oil prices in the time to come. Investors have also started to push corporations to focus more on renewables instead.