According to industry sources, the NAM joint venture between ExxonMobil and Shell is being put up for sale, with it possibly raising around a billion dollars for the two oil majors.
NAM is one of the largest and oldest natural gas ventures in Europe, having been established following the 1959 discovery of the Groningen gas field, one of the world’s largest gas fields and the largest in Europe. Production started at Groningen in 1963, and it was a major source of European natural gas until 2014, when production at the field started to decline. Moreover, seismic activity prompted the Dutch Government to decide to shut down the field by 2023 or 2024, although it has since said this could be delayed due to interruptions in gas supplies from Russia.
Shell and ExxonMobil, which also make grease and other lubricant products, have both been trying to disburse aging assets, so they can focus on their core business activities. NAM’s other assets include about 20 offshore platforms and dozens of fields, as well as three processing plants and a pipeline network.
The combined onshore and offshore assets reportedly produced natural gas at a rate of 2.4 million cubic metres (mcm) per day in 2021, but with further investment, this could potentially reach 2.8 mcm per day.
High energy prices and a renewed interest in domestic gas production will likely attract potential buyers, but the venture also comes with a number of aging assets that will require substantial spending on decommissioning.