An Exxon sign is seen at a gas station in the Chicago suburb of Norridge, Ill., on Oct. 27, 2016.Jim Young/Reuters
Exxon Mobil Corp expects a gain of as much as $3.6 billion from the sale of its Norwegian oil and gas production assets to significantly lift results for the fourth quarter, according to a regulatory filing on Friday.
The gain from the sale of assets in Norway to Var Energi AS, majority owned by Italian major Eni SpA, is also expected to offset lower margins in the company’s refining and chemicals businesses.
The Norway deal in September, a part of Exxon’s earlier plan to divest about $15 billion in nonstrategic assets by 2021, included ownership interests in over 20 producing fields with a combined production of about 150,000 barrels of oil equivalent per day in 2019.
The regulatory filing also showed that Exxon’s hard-hit chemical business could slash its profit in the fourth quarter, compared with the third, due to weak margins resulting from a global glut of polyethylene.
Continued pressures on refining margins and the impact of derivatives on the business of making gasoline, diesel and other products are also expected to weigh on profitability in the company’s downstream business.
Operating profit from Exxon’s core oil and gas production business could rise to as much as $2.7 billion, from $2.2 billion in the third quarter. The sale of the Norway business is expected to add $3.4 billion to $3.6 billion to the upstream unit’s total income.