Exxon Mobil (NYSE:XOM) may have trouble finding buyers for its Asia Pacific assets, as the company considers a divestment program that could be worth as a much as $5B, according to analysts at Wood Mackenzie.
XOM has said it aims to divest up to $15B worth of assets by 2021 and signed a deal late last month to sell its Norway upstream operation for $4.5B.
The oil majors "have more than $70B of assets up for sale, so there is clearly no shortage of supply for potential buyers," says said Wood Mackenzie research director Andrew Harwood. "In addition, recent merger and acquisition activity in the Asia Pacific has been dominated by a handful of regional national oil companies... It remains to be seen if these players still have the financial capability to support further acquisition ambitions."
XOM wants the growth potential of Papua New Guinea and the long-term, high-margin cash flow from the Gorgon LNG project in Australia to "form the backbone of [XOM's] Asia Pacific portfolio for the next decade," and disposing some or all the other Asian assets would allow the company to refocus on more material growth opportunities in the region and elsewhere in its global portfolio.
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