California oil-production venture sale delayed

The sale of a Shell Plc and Exxon Mobil Corp oil-production joint venture in California has been pushed back to the first quarter of next year for U.S. regulatory approvals, the companies said on Thursday.

In September, IKAV agreed to pay $4 billion for Aera Energy, a Shell-Exxon business that produces nearly 25% of California's oil output. The firms have slashed older properties in order to focus on more lucrative assets.

The sale, which was originally due to close this month, is pending a review by the Committee on Foreign Investment in the United States, which weighs national security risks of sales to foreign-owned companies. Patrick Evans, a spokesman for IKAV, said the closing is expected by the end of the first quarter next year.

Evans said that Financing has not been an issue and IKAV is attracting strong interest from investors, and we are currently reviewing several additional market opportunities.

Shell owns 51.8% and Exxon the rest of the 25-year-old Bakersfield, California, venture that pumped about 95,000 barrels of oil and gas per day last year. A Shell spokeswoman confirmed the delay.

The $4 billion purchase price will be split between the two companies. Shell faces a $300 million to $400 million impairment charge on the deal.