Chevron to offload Asian assets worth $5 billion

The Chevron logo is displayed at a Chevron station on Oct 30, 2015 in Greenbrae, California. [Photo/VCG]

Chevron Corp, the second-largest US oil company, plans to sell assets in Asia worth $5 billion, including its stake in a Chinese offshore oilfield, sources were quoted by the Wall Street Journal on Thursday as saying.

The US company is expected to sell its shares in the offshore oilfield venture with Asia's largest offshore oil company CNOOC Ltd in August, which could fetch about $1 billion, the report said.

Beijing-based CNOOC and Chevron did not immediately respond to comment.

Chevron said in October that it will sell assets totaling $10 billion by 2017. The oil giant is also looking for buyers for its geothermal assets in Indonesia, and is considering offers worth more than $2 billion, the Journal reported, citing people familiar with the matter.

Oil majors have to cut output and streamline businesses to make their ends meet in the face of headwinds from lower crude oil prices, experts said.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said the company is putting its good offshore assets up for auction in order to sell at good price to cover the balance sheet.

"It is a listed company, so it has to consider the interest of its shareholders and investors. I think the assets are really good ones that may be undervalued giving the current prices of crude oil," he said, adding all global oil majors are planning to trim their lower-margin assets.

Royal Dutch Shell Plc is putting small refineries on the auction block - for example, it is looking for buyers for its Martinez project in California.

He said the move will also help the US company to focus on its natural gas businesses, betting big on China's thirst for clean fuel.

The company's Gorgon project is on track to deliver its first cargo of liquefied natural gas from Australia to Chinese buyers such as ENN Energy Holdings Ltd, beginning in 2018 or the first half of 2019. Chevron had previously disclosed a deal to supply 1 million metric tons of LNG per year to China Huadian Group for a decade starting in 2020.