ExxonMobil, Shell to Sell $1.5 Billion Natural Gas Joint Venture

Super giants Exxon Mobil and Shell are considering the sale of their NAM gas production joint venture in the Netherlands, Reuters reported on Tuesday, citing industry sources and a document it has seen. half, with a potential sale valued at up to $1.5 billion.

Shell and Esso formed the NAM joint venture in the 1950s and began producing gas from the giant Groningen field in the Netherlands in the 1960s. According to NAM's website, the company supplies 75 percent of the natural gas needed by Dutch households and businesses. 93% of households in the Netherlands use natural gas, which accounts for 45% of all energy in the Netherlands.

Reuters noted that Shell and Exxon Mobil's decision to sell one of the oldest natural gas producers is part of a plan by the two companies to divest aging assets that they no longer consider core to their respective businesses.

NAM's assets for sale, which include three natural gas processing plants, a pipeline network and offshore gas fields, could be worth between $1 billion and $1.5 billion, according to Reuters sources.

Sources told Reuters that the two international oil and gas majors expect Europe’s current urgency for gas supplies and high gas prices could make the assets attractive to potential buyers.

After years of discussions and measures to curb output at the field, the Dutch government decided in 2018 that production at the Groningen field would end in 2030, cutting output by two-thirds by 2021-2022, and then again.

However, earlier this year, the Dutch government said that to secure supplies, the country may need to transport more gas in Groningen, due to a long-term export contract with Germany and a Dutch company that handles imported gas for the Netherlands. The commissioning of facilities used by households has been delayed. Groningen was once the largest natural gas field in Europe.

The Dutch government plans to double the output of the Groningen gas field this year.