Shell would like to leave Aera Energy | New
One of Aera Energy LLC’s two partners is seeking to pull out of the Bakersfield-based oil producer, according to a report last week that relies on comments from four anonymous sources.
London-based news service Reuters said Royal Dutch Shell Plc. informed Exxon Mobil Corp. of his intention to leave their 24-year partnership. It would be the Anglo-Dutch oil major’s latest move to sell carbon-intensive assets as part of efforts to reduce emissions.
It was not clear on Tuesday what a withdrawal from Shell could mean for Aera and its 1,100 employees, most of whom are based in Kern. The company is responsible for about a quarter of the oil and gas produced in California.
None of the parties involved have confirmed or denied the Reuters report, which cited people familiar with the talks who spoke on condition of anonymity because the companies’ talks are private.
The Houston-based US subsidiary of Shell said it had no comment, while a spokeswoman for Exxon Mobil said the company was not commenting on “market rumors or speculation about our plans. ‘business”.
A spokeswoman for Aera said the company could comment later if decisions were made that could impact local stakeholders.
“Aera does not comment on the details of our business strategy or speculate on possible business development opportunities that may or may not occur in the future,” spokeswoman Cindy Pollard said via email. “While we make decisions that could impact the communities we live in or the stakeholders in Aera’s business, we remain committed to communicating internally and externally as soon as possible. “
Reuters noted that Shell sold its refinery in Washington earlier this year, as well as its stake in a refinery in Texas, and that it was considering selling its stakes in the Texas Permian Basin oil fields.
The press service also reported that a Dutch court had rejected the company’s efforts to reduce the carbon intensity of its products by at least 45% by 2035. Calling the decision insufficient, the court said instead ordered Shell to reduce its emissions by 45% from 2019 levels by 2030..
Aera’s founding CEO, retired oilman Gene Voiland, noted on Tuesday that Shell had long signaled its intention to pull out of the oil business in favor of electricity. But while stressing that he had no specific information about the proposed divestiture of Aera announced by the company, he said the Reuters report was still a surprise given the high quality of the company’s California assets. .
“Saying like, ‘I’m going to quit it all,’ it’s just surprising in a way,” Voiland said. “I know they are under a lot of pressure but it’s surprising someone would do that.… You are making a huge bet” by leaving, he added.
Bakersfield Oil Director Steve Layton, chairman of local oil producer E&B Natural Resources, speculated that Exxon Mobil could end up buying Shell’s stake, although that could also go to a more aggressive company and keen to expand Area operations.
“It’s a guessing game at this point,” he said.
Reuters report was picked up by industry news site Oil Octobers, who said Shell is the majority owner of Aera with a 52% stake in the joint venture.