Exxon to sell Norway assets to Eni's Var Energi for $4.5 billion

MILAN (Reuters) - Exxon Mobil Corp has agreed to sell its Norwegian oil and gas assets to Var Energi AS for $4.5 billion, ending its production in a country where it started operations more than a century ago.

The deal includes ownership interests in more than 20 producing fields mostly operated by local producer Equinor with a combined production of about 150,000 barrels of oil equivalent per day in 2019.

ExxonMobil, which will hang on to its refining operations and retail network in the country, said the sale was expected to close in the last quarter of this year.

The transaction is part of the U.S. major’s plans to divest about $15 billion in nonstrategic assets by 2021.

Reuters had exclusively reported earlier this month that Exxon had agreed to sell its Norwegian assets.

In a separate statement, Var Energi, 69.6% owned by Italian major Eni SpA, said the acquisition would make it the No. 2 exploration and production company in the area with overall resources of 1.9 billion barrels of oil equivalent (boe).

Total production is expected to be around 300,000 boe per day in 2019 and will grow to more than 350,000 in 2023 as it invests some $7 billion in development projects.

“The acquired assets complement and strengthen Var Energi in core areas ... and open up new opportunities for growth,” said Eni Chief Executive Claudio Descalzi.

Eni set up the unit, which is 30.4% owned by Norwegian private equity HitecVision, at the end of 2018.

A source familiar with the matter said the deal meant Eni would have an equity production from operations of 220,000 boe per day, double what it had forecast a year ago.

Var Energi said it would fund the deal with existing cash resources and a loan fully underwritten by BNP Paribas.

Reporting by Stephen Jewkes in Milan and Shanti S Nair in Bengaluru; Editing by Francesca Landini and Matthew Lewis