Exxon Mobil Corp came to an agreement with Var Energi AS selling its oil and gas assets in Norway for $4.5 billion, a deal which will end Exxon’s more than a century–long production in the country.
Exxon’s deal also includes ownership interests in more than 20 production fields, which produce about 150,000 barrels of oil equivalent (boe) every day in 2019 and most of which have been operated by Exxon through local producer Equinor.
The agreement to sell Norwegian production assets is likely to be closing in the last quarter of this year, but ExxonMobil continue its refining operations as well as retail network in the country.
The deal is part of Exxon’s $15 billion divesting strategy of selling off its nonstrategic assets by 2021.
Earlier in September, in an exclusive report, Reuters said that the U.S. major oil producer had agreed to sell its production assets in Norway to a local firm.
Var Energi’s 69.6% stakes have been owned by Eni SpA, a major Italian oil company which stands among Europe’s largest companies in terms of sales.
In a separate statement, Var Energi said that the acquiring assets from Exxon would make it second largest oil and gas exploration and producing company in the area by providing total production capacity of 1.9 billion boe.
Var Energi is expecting the total production to be reaching about 300,000 boe per day in 2019 and its plans of investing $7 billion in development projects will likely to be bringing the total production to reach more than 350,000 in 2023.
The acquisition of assets from Exxon will provide Var Energi with ability to set off and hold stronger position in core areas of business and will bring in new growth opportunities for it, said Claudio Descalzi, Eni’s CEO.
Var Energi is in plans of funding the deal with cash on hand and a loan from BNP Paribas that will be fully underwritten.