Shell Plc and Exxon Mobil Corp owned the California oil joint-venture Aera. Recently, it was confirmed that Aera has been sold to IKAV, a German asset manager in a $4 billion deal. This deal marks the end of a 25-year-long partnership between California’s largest oil producers.
The two companies have moved out of the mature energy properties at a time when the high gas prices and oil prices are directed towards new deals and opportunities. Shell and Exxon were already in talks for the sale of the San Joaquin Valley property.
Transaction to be fulfilled by Q4 in 2022
IKAV is known for its conventional and renewable energy investments. After the deal, it will take charge of California’s early energy production. It has $2.49 billion under management and is the owner of solar, wind, geothermal, and oil & gas operations. IKAV is operating a natural gas business in Colorado which was acquired from BP in a deal two years ago.
After the regulatory approvals, the transactions will be settled by the Q4 of 2022. According to reports, Shell will be facing a $300 to $400 million impairment charge due to the sale. A comment released by Zoe Yujnovich, the Director of Shell Upstream said that the sale follows a strategy to focus “on the positions with high growth potential and a strong integrated value chain”.
Shell Plc and Exxon Mobil Corp are planning to keep their California operations which also includes the gas stations.