The goal is $15B by YE2021. With the British North Sea we get to $7.5 to 8B by YE. I know I am on 3 NDAs but little progress after a lot of work on a lot of folks part. Why can't we close the deal? Has Dallas changed its mind?
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Just look at the mo--ns we have responsible for divesting these assets and there is your answer. They are an incompetent group of sycophants, telling the MC that are junk and no return assets have big time value, which is exactly what the MC wants to hear. To support what the MC nts to hear, they compute corrupt/unethical/false retention values, and then tell the MC that the offers are to low and we need to retain these assets. It is one big circle of lies, falsehoods, misdirection and incompetence. This is nothing new, been going on for many years. The MC really does not want to divest. But when the MC does decide to divest, the retention values we be reworked and magically those same offers will be good enough to accept the offers. None of this is surprising from an MC that invented the new and improved PIP to get rid of high wage earners, retirement eligible employees.
Additionally, some of the assets we are trying to sell are pure junk. when we bought them they were pure junk and we over paid them as well. Another example of poor management decisions and corrupt/unethical/false economics on those investment decisions. So now we are trying to sell assets that should have not been purchased to begin with, and the offers we are receiving are appropriately valued, however because we over paid and over invested, selling at these offers will require asset write-downs. Asset write-down are a huge red flag that somebody made a big mistake, and those somebody's are our current senior executive, VPs, Presidentes and MC. And since they are the best and brightest of us all, and make no mistakes, we will never sell an asset requiring a write down, therefore you got to insure the RV is well above book value.
And the downward spiraling of XOM continues.
@mza+1dzxtoqy Just because someone divested a lot of assets doesn’t mean they made good deals. I’m not saying they didn’t, just a general statement. I mean we could sell all assets for $5 but that doesn’t mean it was a good sale
Our retention values are always massively overstated because our NPV assumes we continue investing capital in the asset. But anything we're considering selling is never competitive for capital against other projects. So the MC thinks the market is lowballing us and we're so smart for keeping this junk, but we never end up funding those assets after we take them off the market, and they become worthless because we didn't put a little capital in them to actually get the NPV that was shown as our RV. Classic EM.
CCS potential is altering the divestment opportunity space currently.
@egv+1dzxtoqy and therein lies the question - are we getting lowball offers or are we overvaluing our assets? Shell has managed to divest a significant chunk of assets this year...
Prices aren’t as high as you’d hope for, given public companies get lots of bad publicity for spending billions on non green. Hard to justify to investors. So the state run companies know they can command better prices, especially as mentioned we’ve made public commitments to doing something, both in terms of sales and green. State run companies also have to balance the states needs, which currently many are spending on other things.
Also you have great uncertainty about the long term future of all companies assets, and nobody wants to be stuck with a ton of land that needs to be cleaned up and then sold for a significant loss in 20/30 years.
We never will, but becoming a private company would help us out immensely on both selling and buying assets. Less publicity and so much less scrutiny from investors. Never will happen though.
Not a lot of interest in most of the upstream assets. I was under NDA for some of the Asian divestitures, and the offers were not close to what management was looking for
Are you talking of the sale to NEO Energy of the North Sea fields operated by Shell in a 50/50 JV ? That was announced in Feb this year and I was under the impression that the deal was done.
I'm not involved in the discussions and haven't signed any NDA, just watching ,with by bucket of pop-corn but there are similar issues with upstream African assets sales (Chad/Cameroon, Equatorial Guinea, Nigeria shallow water, and maybe others I'm not aware of). A lot of discussions and little progress with, in some cases, governments and/or NOCs throwing wrenches in the cogs... Let alone the typical arrogant tone and attitude of big mamma EM that doesn't help.
Problem is that when you set asset sales objectives (amount and timeline) and make announcements urbi et orbi to please the investors and save you a-s-s as a CEO, you're just giving a very powerful negotiation leverage to the buyers... It reminds me of the BP/Mobil European JV dissolution, required by the EU anti-trust authorities to clear the Exxon/Mobil merger. BP simply waited until Exxon, who was in a rush to get the merger approved, had enough and they picked the assets they wanted at the price they wanted. Easy...