© Reuters FILE PHOTO: A sign is seen at an Exxon gas station in Brooklyn, New York City, U.S., Nov. 23, 2021. REUTERS/Andrew Kelly/File Photo
By Sabrina Vale
HOUSTON (Reuters) – ExxonMobil Corp and Shell (LON: ) Plc confirmed on Thursday the sale of California oil combine Aera to German asset manager IKAV for $4 billion, ending a 25-year partnership. The state’s largest oil producers.
The sale reflects the two companies’ exit from mature energy properties at a time when higher oil and gas prices are supporting new deals. Reuters reported this week that the oil giants are in advanced negotiations over the sale of San Joaquin Valley assets.
The deal makes it a company that holds common and renewable energy investments to keep the living heritage of California’s early oil and gas production alive. IKAV has €2.5 billion ($2.49 billion) under management and owns wind, solar, geothermal and oil and gas operations. It operates a Colorado business that was acquired from BP (NYSE: ) two years ago.
The transaction is expected to close in the fourth quarter of 2022. Shell said it expects $300 million to $400 million in damages as a result of the sale.
IKAV buys assets in hard cash to maximize their return on investment, it said on its website. Last year it built a solar power plant in Italy and took a majority stake in Italian gas-fired operator Metaenergia.
Exxon (NYSE: ), which owns 48% of Era, is moving operations as it focuses on offshore Guyana, Brazil and liquefied natural gas projects. The agreement provides the target to sell assets of 15 billion dollars.
“The sale of Aera is consistent with our strategy to focus investments in low-cost oil and natural gas to meet consumer demand and create value for our shareholders,” Liam Malone, president of Exxon Upstream, said in a statement.
Zoe Yujnovich, director of Shell Upstream, said the sale “follows a strategy to focus on areas with high growth potential and strong integrated value chains”.
Era was founded in 1997 and has operations in eight offshore fields in Central California. In the year By 2021, the company will produce about 95,000 barrels of oil and gas per day, the statement said.
Both oil producers are maintaining their other California operations, including gas station chains.
($1 = 1.0057 EUR)