German utility RWE to sell oil, gas E&P unit

German utility RWE AG announced plans to sell its oil and gas exploration and production business, RWE Dea AG, based on a decision by the firm’s executive board regarding an overall corporate strategic repositioning.

“The planned disposal would…take considerable pressure off future capital expenditure and therefore make an essential contribution to improving RWE’s financial headroom,” an RWE news release said.

Executives are evaluating their options regarding how such a divestiture might be implemented.

RWE Chief Financial Officer Bernhard Gunther said E&P is capital-intensive. The Hamburg-based RWE Dea has acreage and production assets in 14 countries with an emphasis toward the North Sea and North Africa. Last year RWE Dea produced 84,000 boe/d.

Previously, RWE Dea planned to sell some exploration licenses, mostly in Egypt. But Gunther said those assets attracted only limited interest from potential buyers, and the executive board now believes the entire exploration and production business is more apt to attract a buyer.

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