European oil majors Shell, Eni, and OMV are looking to sell their oil and gas assets in North African country Tunisia, sources in the industry told Reuters on Friday.
Tunisia has been struggling to provide a stable regulatory environment for foreign firms over the past ten years since the Arab Spring of 2011. At the same time, Europe’s oil firms are now more aggressively looking to divest non-core assets to cut debt and open more investment opportunities in low-carbon energy sources as they plan to drastically cut emissions and become net-zero energy businesses in three decades.
According to Reuters’ sources, Shell has hired Rothschild & Co. to assist in the sale of its Tunisian assets, while Eni has retained investment bank Lazard for the sale of its operations in Tunisia. OMV, which has already sold part of its Tunisian portfolio, is also looking to exit the North African country, the sources told Reuters.
Italy’s Eni, which has been present in Tunisia since 1961, produced 1 million barrels of oil and condensate in the country in 2019, while annual gas production stood at 4 bcf. Eni has nine concession contacts and an exploration permit, Borj El Khadra, in Tunisia, according to its website.
Shell, which has been present in Tunisia for almost 90 years, sold in 2011 its downstream business but continued upstream exploration. With the 2016 acquisition of BG Group, Shell became the owner of producing offshore gas fields and their supporting facilities, a liquefied petroleum gas extraction plant, pipelines, storage, and export terminals.
Austria-based OMV has already sold part of its business in Tunisia, divesting some of its operations in 2018, but retaining its ownership of the development of the Nawara Concession, involving gas field infrastructure and a pipeline from a central processing plant.
The Tunisian assets of those majors may no longer be considered important given the net-zero pledges, while the political environment in Tunisia may have also played a role in the potential exodus.