Global energy major ExxonMobil has abandoned plans to sell its stake in the giant Bass Strait oil and gas fields off the coast of Victoria, more than a year after putting the assets on the market.
ExxonMobil has been seeking a buyer for its stake in the 50-year-old Gippsland Basin joint venture, which it jointly owns with BHP, but the company told its workforce at 11am on Friday it had decided to retain the assets following an “extensive market evaluation”.
“We believe Gippsland Basin and the Kipper unit are more valuable as part of our portfolio and we will continue to operate rather than divest,” an Exxon spokesman said.
The Bass Strait oil and gas fields have traditionally supplied up to half of Australia’s east-coast gas demand, but have recently been in rapid decline. Diminishing supply from offshore wells and the search for more reservoirs has gained heightened attention in recent years as authorities warn of an impending supply shortage from as early as 2023 unless more is brought to market, and gas-reliant manufacturers blame high gas prices as they shut their doors in Victoria and NSW.
The Morrison government has made increasing gas production a priority of the nation’s post-pandemic economic recovery.
Australian Manufacturing Workers Union organiser Steve Dodd said ExxonMobil’s decision was being broadly welcomed by the workforce.
“They no longer have the for-sale sign up,” he said. “It gives our members some permanency, they won’t have to reapply for their jobs with some new employer.”
Private equity, ASX-listed Beach Energy and AGL Energy, Australia’s biggest power and gas supplier, have been speculated as potentially interested purchasers of a stake in the joint venture.
BHP is separately seeking a buyer for its 50 per cent stake in the joint venture. A BHP representative on Friday said the company continued to assess its divestment plans in the Bass Strait.
“This is a complex process and will take time, and we will consider the implications of recent announcements,” the spokesman said. “While that work is ongoing, we will continue to work closely with the operator to deliver gas and liquids to customers, and generate value for the community and our shareholders.”
BHP chief executive Mike Henry in August said the mining giant planned to continue to invest in its petroleum assets, recognising the opportunity to grow value in the coming years. But it would adopt a “balanced approach” to the portfolio, he said.
“We will pursue targeted divestments of later-life assets – something we have a strong track record in. And this includes an intended exit from Bass Strait,” Mr Henry said at the time.
Source: Thanks smh.com