US Oil Firms To Shift Focus Back To Local Market?

It is a testimony to the strength of the burgeoning US onshore natural gas sector that big oil companies, such as Suncor and Oklahoma City-based independent Devon Energy, are prepared to divest their international operations and focus investment on their North American onshore developments in a 'shrinking to grow' philosophy. Indeed, the US oil sector was hit hard during the downturn, and this was further compounded by the plummeting price of oil. As a result, Devon, which is selling its offshore operations in the Gulf of Mexico, and its international portfolio spanning Brazil, Azerbaijan and China, is not doing so at the top of the market. Just over a year ago, when both oil and natural gas prices were touching record highs, a sale would have undoubtedly yielded higher valuations. Now the firm expects its divestment programme, which is set to begin in Q110, will raise post-tax proceeds of US$4.5bn-US$7.5bn, attracting a host of bidders both local and international in the process, and that includes mineral-hungry China.

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