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Chevron Divests Its U.S. Gulf of Mexico Shelf Properties

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Chevron is expediting its selling of shallow water U.S. Gulf assets to transition to a deepwater-focused business with fewer, more complex assets.

“This process is consistent with Chevron’s ongoing efforts to align its portfolio of assets with overall long-term strategies,” a Chevron spokesperson said.

Marketing of all its Gulf shelf assets is part of the company’s plan to adapt to the changing business environment which includes revising organizational structures, increasing efficiencies and reducing expenses.

“Our asset sales program has been successful as well-timed transactions have captured good value and generated $11.5 billion in cash through the end of 2015,” the Chevron spokesperson said. “Over 2016 and 2017, we’re targeting another $5 billion to $10 billion in divestments.”

In addition to its Gulf shelf and Gulf pipeline assets, Chevron also is selling assets in New Zealand and Canada, along with its Hawaii refinery, and downstream businesses in South Africa, said Chairman and CEO John Watson during the company’s fourth-quarter 2015 earnings call.

“Despite the weak market, we believe that Chevron will still be able to monetize its U.S. Gulf of Mexico assets as there still appear to be buyers for producing assets,” according to a Feb. 19 Tudor, Pickering and Holt analyst note.

Chevron reportedly is marketing 27 fields which generated around $420 million of earnings before interest, taxes, depreciation and amortization in 2015. The company expects to complete this process by year-end 2017.

Article written by HEI contributor Aliyah Cole.

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