Devon Energy said this morning it plans to sell off its Gulf of Mexico exploration portfolio and international business. It plans to take the estimated $4.5 billion to $7.5 billion it will get from the sales and plow it back into U.S. and Canadian projects and to retire debt.
The announcement comes as BP says a test in the Kaskida field in the Gulf — which Devon has a 30 percent stake in — found oil. Good timing on those two announcements, don’t you think?
The NYT’s Deal Book notes that the Chinese might be particularly interested in Devon’s share of GOM exploration and production:
Barclays analysts call Devon’s Gulf holdings “high-risk” given the cost of deepwater projects, but who else has the deep pockets and appetite for risk that national oil companies have?
“One company that might be interested in taking the risk would be China National Offshore Oil Corporation, known as Cnooc. It recently agreed to buy a stake in some of Statoil’s Gulf assets, the first time that a Chinese company would take an ownership interest in energy assets in the United States.
Only four years ago, Cnooc’s $18.5 billion bid for American oil company Unocal collapsed under pressure from Congress amid concerns about American oil assets falling under the control of the Chinese government. Since then, the Chinese have been wary of bidding on American energy assets and have concentrated their investments on undeveloped fields at home and in Africa, the Middle East and South America.
The Statoil deal seems to have changed all that. But Devon’s assets could be too much, too soon for Cnooc. It may simply continue to buy small stakes in fields across the region before it is ready to make a major purchase.”