Shell’s and Total’s portfolios could be of interest to BP: studies
BAKU, Azerbaijan, Sept.23
By Leman Zeynalova – Trend:
A Rystad Energy study of the geographical spread of ExxonMobil, BP, Shell, Total, Eni, Chevron, ConocoPhillips and Equinor – which are called “Majors+” – reveals that to adjust to the energy transition, the eight companies may need to divest combined resources of up to 68 billion barrels of oil equivalent, with an estimated value of $111 billion and spending commitments in 2021 totaling $20 billion, Trend reports.
“Our key criteria for determining whether a Major+ would benefit from staying in a country are the company’s cash flow over the next five years, the potential growth in its current portfolio, and its presence in key E&P growth countries towards 2030. Based on this we see that the Majors+ may seek to exit 203 country positions and as a result reduce their number of country positions from 293 to 90.
“Rystad Energy’s study shows that all the Majors+ companies are likely to keep a presence in the US, and most of them may also remain in Australia and Canada. On the other end of the scale we see quite a few countries with only one oil major present, including Argentina (BP), Ghana (Eni), Thailand (Chevron) and Guyana (ExxonMobil). In some of these countries it could be tempting for others to stay or increase their presence as the competition may be more limited. At the same time, these countries could also be growth targets for other companies than the Majors+.
“BP, Eni and ConocoPhillips could consider acquiring the Indonesian portfolios of ExxonMobil, Total and Shell. Shell’s and Total’s portfolios could be of interest to BP if the UK-based company wants to enlarge its Indonesian LNG asset base and take on a new growth asset. BP could swap its position in Algeria for Eni’s holdings in Australia. As BP’s Algerian portfolio is valued at around $320 million and Eni’s Australian portfolio at about $466 million, the companies would have to find additional conditions to even out a swap. Another example could be Shell swapping its assets in Norway for Total’s portfolio in Oman,” the company said.
Rystad Energy also expects that the Majors+ will divest assets with high emission intensity to meet long-term targets for reducing emissions.
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