Chevron Is Said to Seek Buyers for $1 Billion in U.S. Assets
Chevron Corp. (CVX) is seeking to sell pipeline and storage operations in Texas and Louisiana that together may fetch more than $1 billion, people familiar with the matter said.
Chevron is working with Jefferies Group LLC to find buyers for at least four natural gas and crude oil pipeline operations, said two of the people, who asked not to be named because the process is private. The San Ramon, California-based company began sending out offering materials this week, the people said.
Diversified energy companies have been seeking to sell or spin off transportation and storage operations to cut costs and focus on exploration. Chevron sold a pipeline business in the Northwestern U.S. last year to Tesoro Logistics LP, while Royal Dutch Shell Plc and Chesapeake Energy Corp. made similar divestitures.
Chevron is looking to sell the West Texas LPG Pipeline LP, a natural gas pipeline 20 percent owned by Atlas Pipeline Partners LP, one of the people said. It’s also seeking buyers for a gas storage facility in West Texas, a crude oil terminal close to the Gulf of Mexico, and at least one of its pipelines in Louisiana, this person said.
Chevron Spokesman Kent Robertson declined to comment on the sale as did Jefferies spokesman Richard Khaleel. The company plans to sell some oil and gas assets to focus on exploration prospects in Iraq, Canada, and Australia, Chevron’s Chief Financial Officer Pat Yarrington said in a conference call with analysts in November.
Chevron will report a fourth-quarter decline in profit amid a slump in oil and natural gas production, according to a statement on Jan. 9. The company, run by Chairman and Chief Executive John S. Watson, plans to spend close to $40 billion on new terminals and wells under a plan to boost output by 20 percent by the end of 2017.
The company’s shares have dropped about 4 percent this year, giving it a market value of over $230 billion.
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