Royal Dutch Shell is likely to leave Aera, its California-based oil and gas-producing joint venture with Exxon Mobil, Reuters reported.
Shell has divested numerous carbon intensive assets, selling its refinery in Washington state to Holly Frontier and its stake in a Houston-area refining joint venture to Petroleos Mexicanos as it shifts new investments to renewables and power.
Shell is also considering a sale of its assets in the Permian Basin of Texas, Reuters previously reported.
Aera produces about 125,000 barrels of oil and 32 million cubic feet of natural gas each day, accounting for about 25 percent of the state’s oil and gas production.
Shell has notified Exxon of its plans to exit the venture. A Shell spokesperson declined to comment, citing company policy.
The joint venture, headquartered in Bakersfield, California, produces primarily in the San Joaquin Valley. Shell has sold all of its California oil refining operations, some of which had pipeline connections to the fields.
Shell and other Europe-based oil producers such as BP and TotalEnergies pledged to lower emissions through increased investment in renewables while divesting some oil and gas holdings.
Shell, one of the world’s largest oil companies, said this year it would aim to cut the carbon intensity of its products by at least 45 percent by 2035, and by 100 percent by 2050 from 2016 levels. A Dutch court has ruled that Shell’s efforts are not enough, ordering it to lower emissions by 45 percent by 2030 from 2019 levels.