Conoco Ends Exclusive Talks With Ineos for North Sea Fields
(Bloomberg) -- ConocoPhillips has ended exclusive talks with Ineos over a package of North Sea assets and will open up the sale to other bidders, according to an internal memo seen by Bloomberg.
The company is engaging with other parties for the oil fields in the U.K., and any sale would take several months to conclude, according to the memo. Conoco confirmed the memo but declined to comment further. The assets are valued at as much as $3 billion, according to people familiar with the matter.
Ineos declined to comment.
Conoco entered exclusive talks with Ineos in the middle of November. The price of oil has been volatile since then, complicating the negotiations. Brent crude dropped from about $67 a barrel to near $50 in December, and is currently at around $62. Ineos was earlier said to be seeking to renegotiate terms of its bid and considering extending the exclusivity period.
Conoco’s North Sea sale comes amidst similar moves by Chevron Corp., which is looking to offload fields in the aging basin and pursue higher returns elsewhere. Houston-based Conoco, last year announced a North Sea-for-Alaska asset swap with BP Plc, as a part of which it agreed to divest a 16.5 percent stake in the Clair Field while retaining a 7.5 percent interest. The package of North Sea assets now on the block includes its remaining Clair stake.
Its shares rose as much as 1.2 percent and traded 0.6 percent higher at $65.69 a barrel as of 9:06 a.m. in New York after reporting fourth-quarter earnings beat analysts’ estimates.
A deal would’ve vastly increased Ineos’s ownership of the oil and natural gas that feed its petrochemical plants. The company, chaired by British billionaire Jim Ratcliffe, almost shut down its plant at Grangemouth, Scotland, in 2015 after struggling to get enough gas to feed it.
It acquired several fields in the North Sea in 2017, as well as the Forties oil-pipeline system and a stake in exploration acreage off Scotland. It also began a still-fledgling effort to extract gas from Britain’s shale rock.
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