Exxon and Shell announce the sale of a significant Dutch gas partnership.
According to a document and industry insiders, Shell and Exxon Mobil have listed one of Europe’s largest and oldest natural gas production companies for sale, banking on rising energy prices amid Russian tensions to draw purchasers.
The sale of the 50/50 NAM joint venture in the Netherlands might bring well over $1 billion for the two largest Western energy companies. It would be a part of both businesses’ initiatives to get rid of outdated property that is no longer essential to their operations.
Shell and Exxon recently began the sale process for NAM’s offshore gas activities, which include numerous fields, about 20 offshore platforms, a network of pipelines, and three processing plants.
Following the discovery of the massive Groningen field in 1963, NAM began producing natural gas and has since been a significant gas supplier for the Netherlands and Europe.
However, since the Dutch government chose to close Groningen field, its output has been steadily declining since 2014. Although the government has stated that the field’s existence could be prolonged, it is anticipated to close in 2023 or 2024.
According to the document, the offshore and onshore NAM assets available for sale produced about 2.4 million cubic meters of natural gas per day in 2021 and have the potential to boost output to 2.8 mcm per day with additional investment.
However, the joint venture contains a number of older assets that will cost a lot to remove and clean up after they are shut down.
The collection of assets also includes NAM’s interests in multiple pipeline networks as well as three gas processing facilities at the Den Helder Terminal, which processes 53% of the gas produced on Dutch offshore fields.
According to sources, the assets have a value of between $1 billion and $1.5 billion.
Nevertheless, Shell and Exxon are hoping that interest in the NAM joint venture would increase as a result of Europe’s increased focus on domestic energy production.
