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Has ExxonMobil Struck A Deal With Italian Eni Firm?

Has ExxonMobil Struck A Deal With Italian Eni Firm?

Exxon Mobil Corporation (NYSE: XOM) has been holding negotiations with Italian oil firm, Eni (ADRs trade Eni SpA (ADR) (NYSE: E)), for quite some time now to take a stake in the latter's Mozambique liquefied natural gas development.

A Reuters report said that the American oil firm and Eni have struck a deal involving a multi-billion-dollar stake based on its sources with knowledge on the subject. However, there was no announcement from either of the companies.

The report further said that the deal would not be disclosed at the request of Exxon. Eni has also refused to react to the report while an Exxon official indicated that the company does not react to the market speculations or rumors.

Related Link: Cheap Oil Is Being Blamed For 200,000 Job Cuts

However, the American firm indicated that it was looking to hold more discussions with the Mozambique government on establishing a production-sharing contract — regarding three offshore blocks in Mozambique, which were revealed October 28 last year.

Eni has not been interested in divesting most of its 50 percent interest in the Area 4 permit. The attraction for the American firm was that there exists 85 trillion cubic feet of gas.

Earlier, Eni was interested in divesting 10–15 percent stake. However, it now reportedly boosted the potential stake selling to about 25 percent.

The Italian firm divested 20 percent of the portfolio in 2013 to China-based CNPC for $4.2 billion. The oil and gas prices have dropped over 50 percent since then. The differences in valuations were also holding them back in publicly announcing a deal.

Thus far, the report has had no impact on the share price of Exxon. Exxon closed Friday's regular trading session up 0.09 percent on the day at $87.56.

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