Kenneth Afor with agency report
Exxon Mobil Corp has announced on Wednesday that it will sell its 50 percent share in the Gippsland Basin oil and gas development in Australia’s Bass Strait as part of the plan of a wider review of its global portfolio of assets.
The sale is expected to hit $3 billion, but analyst and bankers are of the view that the tag could be much lower due to the aging oil fields.
Exxon’s move to sell its Gippsland Basin assets was as a result of a disappointing drilling campaign in the Bass Strait last year in what had been seen as a promising gas prospect, and comes amid plans to drill more wells.
The Gippsland Basin joint venture (JV) located off the state of Victoria has been an old-time supplier of oil and gas in southeastern Australia, but lately, there has been a sharp decline in its output.
“As a pivotal producer on the east coast. We would expect interest to be strong from domestic players that wish to gain greater exposure to rising gas prices,” said Angus Rodger, a researcher at Wood Mackenzie.
Meanwhile, BHP Group, a joint operator with Exxon Mobil refused to comment on Exxon’s move, whether to sell its own stake or interested in buying Exxon’s assets.
Exxon hinted on Wednesday that it is testing and on the lookout for a number of its assets worldwide, including that of Australia for potential buyers.
However, no buyer has signified interest yet on the sale of Exxon’s asset in Australia adding that normal oil productions will continue for the up tent time.
“Exxon Mobil will be testing market interest for a number of assets worldwide, including its operated producing assets in Australia.
“No agreements have been reached and no buyer has been identified,” it said, in a statement.
Moreover, earlier in the year, Exxon Mobil announced that it was looking to raise $15 billion from asset sales worldwide through 2021 but, BHP maintained that they are committed to the GBJV gas products in the region.
BHP said in an emailed content, “BHP recognizes the importance of GBJV to the reliable supply of gas to the east coast, domestic market and we remain committed to maintaining that supply.”
Analysts have predicted few potential bidders with assets in the Bass Strait who are looking for a consortium bid, they include Japan’s Mitsui & Co, Beach Energy, and Cooper Energy.
The Gippsland Basin oil field is not Exxon’s only asset in Australia, it has another producing asset in the country; a 25% stake in Gorgon liquefied natural gas managed by Chevron Corp in Western Australia.