Exxon, Chevron Want to Dump Azeri Stakes

[Marina Schwarz + 1,576]

Exxon, Chevron seek to exit Azerbaijan's oil after 25 years

Interesting. That's supposed to be one of the biggest fields there.

[Rasmus Jorgensen + 1,169]

I don’t really think that this has anything to do with Exxon focusing on shale. I am pretty sure that it just means that Exxon has a far better royalty agreement with Guyana than with the Azerbajian government.

[jaycee + 348]

44 minutes ago, Marina Schwarz said:

Exxon, Chevron seek to exit Azerbaijan's oil after 25 years

Interesting. That's supposed to be one of the biggest fields there.

Very interesting I have a good knowledge of the ACG field and they have not even built the last rig for it yet the detailed design is starting early next year. There was an extension to the profit sharing in 2017 that extends now until 2049 instead of 2024 but that led to a dilution of the ownership to foreign companies and an increase to the Azeri government but still a good return. All I can suggest is that they are pulling out as they can probably get a good price right now since the agreement has been extended and they can sell on a multiple of prospective earnings as now there is a longer agreement in place plus the dying interest from the US means they are probably more worried about the Azeri government trying to lean on them at a later date. This therefore is probably the high tide mark. Who will buy will be interesting will BP go all in or will Azeri government hoover it up to then have a bigger stake than BP. Dangerous for BP the latter. A story to watch for me.

[Marina Schwarz + 1,576]

It would make sense, yes. Especially for Exxon, I guess, what with all these new discoveries it's been making. Not sure how things are in this respect with Chevron.

[James Regan + 1,776]

I have had the pleasure of working in Baku both onshore and offshore it’s a really interesting place. Quite ironic that the corner stone of the legendary Spice Road and former vanguard of the oil industry is now a road block. The Caspian Sea is probably the most logistically difficult region to explore and produce Oil. Only a handful of exploration rigs are available to the point some rigs were built in big parts and transported there to be rejoined. I think the pull out is pure cost it’s just not a viable risk in the current uncertain oil market. The picture shows the predominant solution for offshore production 100s of Kms of roadways to access offshore fields, known as “oily rocks” it’s very a very impressive solution.

Edited December 5, 2018 by James Regan

[Rasmus Jorgensen + 1,169]

7 hours ago, Marina Schwarz said:

It would make sense, yes. Especially for Exxon, I guess, what with all these new discoveries it's been making. Not sure how things are in this respect with Chevron.

I think for Chevron it is something as boring as reducing Capex to free up capital for dividends etc. If you look at all their AGM statements etc they are all focused improving positive cashflow and keeping up dividends. Shale, due to short-cycle nature, could have a part in this. But I think that biggest reason is simply that the majors are getting back to basic. 

[Illurion + 894]

A week or so ago,   Tom Kirkman posting an interesting post entitled:  "U.S. Murphy Oil in talks to sell Malaysian oil, gas assets.

I posted that i felt that was just the tip of the iceberg on a whole series of such "asset adjustments" to come,   given the change in the market brought about by the rapid rise of the USA to being the number one oil producer.   The change will cause US International Oil Conglomerates to "reduce" their number of overseas oil assets,  as they increase their assets at home in the USA.

This Azeri deal sounds like another example of what i was talking about.    EXXON is retrenching.   I once worked for EXXON long ago,  but know nothing personally about this deal.