October 28, 2019

September 2019 Global Projects - ExxonMobil Making Portfolio Changes

Stratas Advisors

Global Upstream Summary

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In September,  global upstream was motivated with new oil and gas exploration and project developments making headway: three oil and gas discoveries in Colombia, Romania and Guyana; first production from offshore Malaysia and the North Sea, two projects located offshore Brazil and in the Caspian Sea made EPC stage progress; and five A&D transactions involving operating assets were announced. New oil and gas discoveries could unveil an estimated resource of about 20 Bcf of natural gas and an amount of oil to be determined. The value of the A&D transactions is estimated to be as much as US $6 billion. In the largest deal, ExxonMobil agreed to sell Norwegian assets for $4.50 billion to Vaar Energi. ExxonMobil is considering selling assets in UK North Sea and Asia Pacific, and focusing its production efforts in the US Permian basin and in deep-water exploration offshore Guyana and Brazil.

Development projects of significance this month include the Sepia in ultra-deep water Brazil; the Utgard in Central North Sea; the GUMSUT-KAKAP Phase 2 in deep water Malaysia; and the ACG Deep Gas Development in the Caspian Sea. The GUMUSUT-KAKAP Phase 2 and Utgard projects both started first production and together will bring 150,000 b/d of oil and 800 MMcf/d of natural gas at peak to global hydrocarbon supply. The Sepia project will bring 180,000 b/d of oil capacity and 177 MMcf/d of natural gas capacity onstream in 2020. In the Caspian Sea, the ACG Deep Gas Development project will output about 900 MMcf/d of natural gas capacity in 2023.

Stratas continues to monitor the upstream scene. Key projects on our screen include closing conditions and regulatory approvals of ExxonMobil’s divesture in the Norwegian North Sea, along with portfolio adjustments under discussion, including interests in the UK North Sea, offshore Australia and Malaysia. Also included are other countries in Asia Pacific, which are part of ExxonMobil’s US$15 billion divestment plan by 2021. The giant Johan Sverdrup project, which is ahead of schedule and under budget, starts up in October. Brazil’s sixth pre-salt round is scheduled on November 7, and 17 companies are qualified to submit bids in the auction: Equinor, Galp Energia, Cepsa and Brazilian independent Enauta are four new players, and Petrobras, ExxonMobil, Chevron, BP, Shell, Repsol Sinopec, Wintershall Dea, Murphy Oil, Petronas, Qatar Petroleum International, Ecopetrol, CNOOC and CNODC are 14 previously qualified companies.


More details about upstream projects updates are included in Stratas Advisors’ Global Upstream Project Analytics (GUPA) service. The Global Upstream Project Analytics service delivers timely and relevant insights and forecasts on global upstream projects.  Analyses and data are delivered through our dedicated web portal in multiple formats including formal and informal analytical content, podcasts, webcasts, and more.  In addition, the service provides access to selected data, interactive charts, and mapping tools. Clients also have access to data tools, interactive custom charting with ability for data downloads, and mapping tools.

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