Bloomberg reports Chevron Corp. (NYSE:CVX) is looking to sell off as much as $1 billion in properties it owns in the oil storage and pipeline business, some of which are partially owned by industry partners. The company’s general shift toward prospecting for new sources is considered to be behind the move that follows a mixed interim earnings report for the most recent quarter, released January 10.
According to Bloomberg, Chevron employed Jeffries Group LLC to handle a transaction that would relieve the oil giant of storage facilities, pipeline holdings, and crude oil operations in the Gulf region. The pipeline part-owned by Atlas Pipeline Partners (NYSE:APL) is one of the assets on the table, the report indicates. In total, the sales could net the oil giant $1 billion or more.
Chevron, which carries a neutral rating from Zack’s, was in the news January 14 when the oil giant got final approval to develop a North Sea project of Alder Field on United Kingdom territory. The project will supply at least 14,000 barrels of oil and 110 million cubic feet of natural gas when it reaches capacity, Zack’s reported. Explorations for projects of this nature are the subject of increasing focus by Chevron.
Though Chevron faces risks in every aspect of its operations, the company may be growing wary of those associated with refinery operations and pipeline management. Chevron is still smarting from the criminal charges and $2 million in fines the company paid following a refinery fire in California in 2012. The San Francisco Chronicle reported on Thursday that an overhaul of all California refinery practices was up for approval but failed to receive endorsement from the federal panel.
That ruling means new directives will be considered for refinery management in California, though they may not be as stringent as the proposed changes that adopted a European model, the Chronicle reports. Major oil industry lobbying groups opposed the measure, as did Chevron, throughout the decision process. Chevron, which is based in San Ramon, California, will be watching the recommendations of the U.S. Chemical Safety Board once the findings of a new study emerge.