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Exxon Mobil Corp and Shell PLC on Thursday confirmed the sale of their California oil joint-venture Aera to German asset manager IKAV for $4 billion, ending a 25-year-long partnership that was one of the largest oil producers in the state.

The sale reflects the two companies move out of mature energy properties at a time when high oil and gas prices favour new deals. Reuters this week reported the oil giants were in advanced talks on a sale of the San Jaoquin Valley property.

The deal puts a company with extensive conventional and renewable energy investments in charge of a living relic of California’s early oil and gas production. IKAV has 2.5 billion euros ($2.49 billion) under management and owns wind, solar, geothermal and oil and gas operations. It operates a Colorado natural gas business acquired two years ago from BP.

The deal is expected to close in the fourth quarter of 2022, subject to regulatory approvals and was signed by IKAV’s subsidiary Green Gate Resources, according to the corporate filing.

IKAV buys assets with strong cash yields and holds them to maximize returns to its funds, according to its website. Last year, it built a solar plant in Italy and took a majority stake in Metaenergia, an Italian operator of gas-fired power plants.

Exxon, which owned 48 per cent of Aera, has been exiting operations in different countries around the world. The sale fits a strategy of focusing investments “in low-cost-of-supply oil and natural gas to meet consumer demand and create value for our shareholders,” said Liam Mallon, president of Exxon’s Upstream Company, in a statement.

Aera was formed in 1997 and has operations in eight onshore fields in central California. In 2021, the company produced about 95,000 barrels of oil and gas per day, according to the statement.

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