Marathon Oil has said it is to start marketing its UK North Sea and Norway assets as part of a continued portfolio optimization strategy.
Marathon Oil president and CEO Lee Tillman said the move came as the business was focusing activity on US resource plays, on which about 60% of its US$5.9billion 2014 budget is to be spent.
Image: The Alvheim FPSO
“The marketing of our North Sea assets represents another example of our ongoing commitment to portfolio management," he said. "In the past three years, we have closed or agreed upon nearly $3.5 billion in non-core asset divestitures, surpassing the upper end of our stated $1.5 to $3 billion target. Our plan to market our assets in the UK and Norway provides an option to simplify and concentrate our portfolio, while increasing our growth rate and accelerating cash flows. This, in turn, presents an opportunity to redeploy capital”, he said.
At year end 2012, Marathon operated 10 licenses on the Norwegian Continental Shelf. Production from its Norwegian assets represented 46% of the company’s non-US liquid hydrocarbon sales and 10% of non-US natural gas sales.
Marathon Oil Norge operates the Alvheim area (65% WI), Volund (65%) and Vilje (46.9%). It also has working interests in the Bøyla project (65%), and the Viper/Kobra discovery (65%).
Marathon Oil has been producing oil and natural gas in the UK for more than 20 years. Current holdings include the Brae complex, which it operates, and stakes in Foinaven (28% WI in the main field, 47% in East Foinaven and 20% in the T35 and T25 accumulations), and the SAGE pipeline (50%).
Net sales from the UK to the end of December 2012, represented 9% of the company’s non-US liquid hydrocarbon sales, and 9% of non-US natural gas sales.
Marathon Oil’s plan, announced at a capital markets day, would see it accelerate its onshore liquids-rich North American Eagle Ford and Bakken rig activity, by 20% each, and increase rig activity in Oklahoma Woodford by 100%.
Of its $5.9billion 2014 capital, investment and exploration budget, about $1.4 billion will be spent on conventional North America and international E&P assets.
These include production operations in Norway, the Gulf of Mexico, US conventional oil and gas plays, Equatorial Guinea, the UK, Libya and developments in the Kurdistan Region of Iraq.
On exploration, specifically, Marathon said it plans to spend $529 million on an exploration program, with activity including seismic surveys and drilling 2-3 net wells (8-10 gross, of which two are company operated) across the deepwater Gulf of Mexico, Ethiopia, Kenya, Gabon and the Kurdistan Region of Iraq.
The remaining 60% of the 2014 budget will be directed at the liquids-rich North America resource play assets.