Apache picks up another piece of the North Sea; Business briefing Energy

ExxonMobil has become the latest oil major to sell off its ageing fields in the North Sea after agreeing a $1.75 billion deal with Apache.

The deal will boost the American buyer's North Sea production by 19,000 barrels per day, or 54 per cent.

The assets sold belong to Exxon-Mobil's subsidiary Mobil North Sea, which represent about a tenth of the group's total production from Britain.

ExxonMobil said that it was not planning to exit Britain and would retain shares in 40 producing fields through its joint venture with Esso and Shell, as well as its "substantial" refining and marketing assets in the country. It said: "The proposed sale does not affect ExxonMobil's other UK assets, or the company's commitment to remaining a significant investor in the UK."

Most oil majors are selling their fields in Britain, where production is declining, to focus on developing new reserves in higher-growth regions. BP, Shell, Total and ConocoPhillips are among the leading oil companies to announce plans to sell their interests in North Sea fields in recent months.

As they have withdrawn from the North Sea, smaller companies such as Apache have stepped in. The company has been aggressively buying up mature North Sea fields since 2003 after it bought a 97 per cent stake in the Forties Field, the largest in the region, from BP.

Its chief executive Steven Farris said that the assets acquired from ExxonMobil were the best it had seen since the BP deal. "There is a portfolio of low-risk exploitation projects and we believe the complex structural setting holds reserve upside," he said.

"These major legacy assets will expand Apache's presence in the North Sea. They bring us significant remaining life, high production efficiency and quality reservoirs - the best North Sea assets we've evaluated since acquiring the Forties Field."

Bankers believe that the North Sea is on the cusp of another round of consolidation among smaller companies as they look to bring in partners to develop new fields.

The sell-off in global markets has hit oil explorers particularly hard, as investors shun companies perceived as too risky. Rather than raise finance by issuing new shares, bankers believe that explorers will have to sell stakes in new projects to larger companies or put themselves up for sale if they cannot attract a partner.