Chevron working to reach $10B in asset sales as it unloads Bangladesh fields

After months of talks, U.S. oil major Chevron has made an agreement to sell its assets in Bangladesh.

To remind, Chevron in October last year confirmed to Offshore Energy Today it had been in commercial discussions about its interest in Bangladesh.

At the time, the company’s spokesperson told Offshore Energy Today that Chevron would “only proceed if we can realize attractive value for Chevron.”

It seems that the company has finally realized the “attractive value.”

Namely, the California-based oil giant said on Monday it had entered into an agreement to sell the shares of its wholly-owned indirect subsidiaries operating in Bangladesh to Himalaya Energy Co. Ltd.

Chevron Bangladesh operates Block 12 (Bibiyana Field) and Blocks 13 and 14 (Jalalabad and Moulavi Bazar fields).

“Closing of the transaction is subject to the satisfaction of certain closing conditions,” Chevron said, without disclosing the financial details of the deal.

The sale of the Bangladesh assets is a part of Chevron’s asset divestment plan to realize between $5 billion and $10 billion in asset sales proceeds between 2016 and 2017, and become “cash neutral” in 2017.

In 2016, Chevron generated $2.8 billion in asset sales. At a security analyst meeting in March, Chevron CEO John Watson said the number in 2017 is expected to be higher than that in 2016, and close to the upper end of the guidance, meaning closer to $10 billion.

The CEO in March said that 2017 asset sales could reduce its 2017 production 50,000 to 100,000 barrels a day from the 4% to 9% range. Cumulative asset sales could reduce top line 2020 production by a total of 150,000 to 200,000 barrels a day.

“We are comfortable that these asset sales are good value decisions,” Watson said at a meeting last month.

On the last day of March this year, Chevron completed the sale of it’s geothermal business in Indonesia to Star Energy Consortium.

Chevron received the cash proceeds upon settlement on March 31, and said it would reflect the gain in first quarter 2017 results. The conclusion of the sale of Chevron’s geothermal business in the Philippines is expected later in 2017.

Offshore Energy Today Staff

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