German company agrees to buy local oil producer Aera from Shell, Exxon Mobil
Sep. 2—A European asset management company has agreed to pay a reported $4 billion to acquire Aera Energy LLC, the Bakersfield-based producer of about a quarter of California's oil and employer of about 1,000 people, most of them in Kern.
If the proposal announced Thursday wins regulatory approval later this year, the sale would end a 25-year-old joint venture by oil majors Royal Dutch Shell Plc and Exxon Mobil Corp.
The sellers attributed the agreement to financial strategy rather than concerns about California's aggressive climate policies and anti-oil regulatory environment.
It was unclear whether the two-part purchase by German-based IKAV would bring significant changes in Aera's local operations. Aera spokeswoman Cindy Pollard said it was too early to tell what lies ahead but that the buyer was impressed with the Bakersfield company's operational history and market positioning, adding its investment values, vision and strategy align "very, very closely with Aera's."
IKAV said in a news release Thursday it is "committed to driving forward Aera's strategy to produce safe, responsible and affordable energy for all of California as well as to help achieve the statewide carbon neutrality goals."
Founded in 2010, Ikav does not currently produce oil or gas in California, but it does pump petroleum in Colorado and New Mexico. It boasts vertically integrated investments in wind and photovoltaic solar power, hydroelectric generation, geothermal energy, pipelines, concentrating solar and energy storage, with a focus on "buy and hold" investments with strong cash yield.
Aera produced 95,000 barrels of oil per day last year, most of it in Kern but also in three other California counties, generating revenue reported at $1 billion per year.
Aera President and CEO Erik Bartsch said in a statement he was excited about Ikav's proposed investment.
"It tells us they believe in the need for oil and gas for decades to come and are confident in our ability to deliver innovative solutions that will help California meet its bold climate goals," he stated.
Shell said by email its decision to sell aligns with its strategy to "resize and rebalance our portfolio towards one that is less complex, carries lower risk and is more resilient." When asked whether California policies influenced the move, a spokesman emphasized the decision was "based solely on our upstream strategy," referring to pre-refining petroleum production operations.
Exxon Mobil, which has reported plans to refocus on offshore oil production in Guyana and Brazil, said by email the sale agreement fits a strategy of focusing investments "in low-cost-of-supply oil and natural gas to meet consumer demand and create value for our shareholders."
Reuters reported the total sale consideration to be $4 billion, an amount Pollard did not dispute.
