Experts from market research firms GlobalData and Wood Mckenzie claim Exxon Mobil exiting the offshore sector in Norway won't hurt the country's oil and gas development


ExxonMobil has seen a drop in profits (Credit: QR9iudjz0/

The potential exit of Exxon Mobil from the offshore sector in Norway is unlikely to have a significant impact on the country’s upstream development landscape, according to market intelligence firm GlobalData.

The oil and gas giant divested its operated assets in 2017, but has held onto various interests in roughly 20 fields in the region.

Now, it is considering selling the entirety of its Norwegian business for a reported $4bn (£3.2bn), leaving questions over the progress of the oil industry in the country, absent the presence of one of its key players.

Daniel Rogers, oil and gas Analyst at GlobalData, said: “The withdrawal of Exxon Mobil will have little impact on the Norwegian upstream landscape, with only one confirmed non-operated project in the pipeline, Trestakk.

“Exxon Mobil’s position in Norway has been dwindling over the recent years; the company offloaded all of its operated assets in the country in 2017 but still retains stakes in 19 producing fields.”


Exxon Mobil historically key to Norway offshore sector but could now be superfluous

Exxon Mobil’s presence in Norway’s offshore sector dates back to the 1960’s when it received the country’s first acreage award, marking the start of its inexorable rise to the summit of global oil and gas.

The note seen by the company’s employees, the contents of which Norwegian newspaper Dagens Naeringsliv made public, said the oil giant was keen to sell its field shares oweing to “much interest” for its assets, as wells as demand for greater focus on its major projects in Guyana, Brazil and Mozambique.

“Norwegian production only accounts for approximately 3% of the company’s total portfolio and the sale could help focus on activities in more core growth regions such as onshore US and deep-water South America,” continued Mr Rogers.

“For potential buyers, the assets would provide steady positive cash flow and an oil weighted production portfolio.

“The company’s Norwegian production in 2018 averaged 155,000 barrels of oil equivalent per day (boed) and has declined year-on-year over the last 11 years due to production declines in major fields such as Statfjord, coupled with the sale of major assets like Balder.

“With estimated remaining recoverable reserves of approximately 400 million barrels of oil equivalent (mmboe) from producing fields there is significant value to be captured.

“Growth opportunities include the Trestakk oil field due to commence production in 2019 with expected gross recoverable reserves of 80 mmboe, the Snorre expansion project expected to extend field life beyond 2040 and gas discovery opportunities at Lavrans and Mikkel Sor.

“A number of potential buyers include Lundin Petroleum AB, Aker BP ASA and PGNiG SA, all who have been active in asset acquisitions in the region of late.

“Local player DNO ASA intends to add to its Norwegian portfolio since its hostile takeover of Faroe Petroleum earlier in the year.

“Rapidly growing Chrysaor Holdings Ltd, which has a track record of acquiring producing assets from the majors in the region, could look to expand its footprint in Norway to further boost its North Sea production.”


Oil giant’s move “unsurprising”

Neivan Boroujerdi, principal analyst for Europe upstream at research and consultancy firm Wood Mackenzie, argued Exxon Mobil’s move doesn’t come as a surpise.

“We recently highlighted Norway amongst a $48bn (£38bn) pool of assets from which we think ExxonMobil could meet its recently announced $15bn (£12bn) divestment target.”

“The sale has the potential to be the Norway’s biggest since Statoil’s merger with Norsk Hydro announced in 2006.

“While Norway is no longer core to the overall business, ExxonMobil’s position is substantial enough to receive an attractive exit price, particularly as Norway remains one of the premium mergers and acquisitions markets in the world.

“It’s a highly cash generative business with low operating costs, producing 150,000 boed.

“The portfolio is predominantly operated by Equinor, which has laid out its own plans for increased oil recovery in the coming years – so it will come with future investment opportunities.

“In terms of buyers, the new wave of North Sea independents are likely to be the front runners.

“Although the oil-heavy portfolio could deter some buyers looking to appease the investor community before an IPO in the coming years.”