* Oil majors set to sell over $110 bln of assets -Rystad
* Uncertainty over oil prices limits buying appetite
* GRAPHIC: Big Oil's selling spree https://tmsnrt.rs/34hd1fI
(Adds comment from Lazard banker)
By Ron Bousso
LONDON, Oct 1 (Reuters) - Leading energy companies are
hoping to sell dozens of oil and gas fields and refineries worth
more than $110 billion to curb both their ballooning debt and
their carbon footprints.
But with the outlook for oil and gas prices uncertain
because of the coronavirus pandemic and a shift to cleaner
energy, finding buyers and striking deals might prove tricky.
"This is not a very good time to sell assets," Total CEO
Patrick Pouyanne said while presenting the French giant's
strategy to switch to renewables on Wednesday.
Eight of the world's top oil companies, Exxon Mobil,
Chevron, Royal Dutch Shell, BP, Total
, Equinor, Eni and ConocoPhillips
, are expected to sell assets with resources of around 68
billion barrels of oil and natural gas equivalent.
Those assets today carry an estimated value of $111 billion,
and are equivalent to around two years of existing global oil
demand, Norwegian consultancy Rystad Energy said in a note.
Oil prices hit their lowest since 1999 in April after a
collapse in demand caused by coronavirus-related travel
restrictions. They have since recovered to around $40 a barrel,
but are not expected to rise dramatically in coming years.
This means an opportunity to snap up cheap assets for
smaller companies like Serica Energy, Cairn Energy
and Jadestone Energy, Peel Hunt analysts said.
Yet with a narrowing pool of buyers and a growing reluctance
to lend to the oil and gas sector, disposals could be tough.
"Oil and gas asset sales will of course put pressure on
market pricing if there are few buyers for these assets,"
Garrett Soden, CEO of Canadian-listed Africa Energy,
which is part of Lundin Group, said.
Reduced investments by the majors could however lead to
tighter supply and higher oil prices, which would increase the
value of their resources, Soden added.
The majors need to sell assets to boost revenues and reduce
debt amassed in the wake of the oil price collapse.
European companies including BP, Shell and Total are also
looking to focus their oil and gas operations on the most
profitable and least polluting projects after pledging to slash
carbon emissions in coming decades.
Exxon and BP each hope to sell $25 billion of assets in the
coming years, while Shell aims to dispose of $5 billion a year.
Spiro Youakim, global head of natural resources at
investment bank Lazard, told Reuters that oil company boards
should consider spinning off unwanted oil and gas production and
refining businesses to attract new investors as buyers such as
private equity lose appetite.
"The majors' portfolios are exceedingly large and they
include more peripheral assets which could be run more
effectively by different types of investors," Youakim said.
(Reporting by Ron Bousso
Editing by Tomasz Janowski and Alexander Smith)
