ExxonMobil looking to exit Australia’s Gippsland basin

ExxonMobil subsidiary Esso Australia Resources Pty Ltd. operates the $4.5-billion Kipper Tuna Turrum project in the Gippsland basin.
ExxonMobil subsidiary Esso Australia Resources Pty Ltd. operates the $4.5-billion Kipper Tuna Turrum project in the Gippsland basin.
(Courtesy ExxonMobil)

Offshore staff

LONDON ExxonMobil has reportedly decided to offer for sale its entire upstream interests in the Gippsland basin offshore southeast Australia.

Wood Mackenzie research director Angus Rodger said: “As a pivotal producer on the east coast, the assets play a key role in supplying gas to Australia’s biggest market.

“As such, we would expect interest to be strong from domestic players that wish to gain greater exposure to rising gas prices, of which there are a significant number.

“That said, these are complex, mature assets. We believe this will lead to a far smaller pool of realistic buyers, who will have to get comfortable with the age of the assets, declining production and significant decommissioning liabilities.”

Rodger pointed out that a previous attempt to sell the Gippsland oil assets failed due to uncertainty over abandonment costs.

So, a new operator may look to extend and increase production from the portfolio in order to defer decommissioning expenditure.

09/18/2019

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