Energy giants Exxon Mobil Corporation and BHP Hilton are mulling plans to sell off depleting assets in Australia. Under consideration for sale are 13 fields, licenses, and the infrastructure in the Gippsland Basin Joint Venture.
BHP said that the area has been in production in oil and gas since the 1960s. The companies each own 50 percent of venture. BHP's Bass Strait unit could be worth approximately $1 billion, according to a note from Citigroup to its clients in May. In that same note, Clarke Williams stated that the liquid production for the unit has been down.
The venture has produced some 4 billion barrels of crude and 8 trillion cubic feet of natural gas since operations in the area began. Presently, the Bass Strait produces mostly gas, and accounts for approximately 40 percent of the gas in the eastern part of the country. Oil production has been in decline since the 1980s.
A spokesperson for the company stated: "ExxonMobil continually reviews its global assets for their contribution towards meeting the company's operating needs and financial objectives, as well as their potential value to others."
The spokesperson went on to say, "We are currently exploring opportunities to market some of the offshore Gippsland Basin fields, licenses and associated offshore infrastructure to third parties" adding "We are seeking to identify third parties with proven experience and strength to operate and capture the remaining potential in these licenses."
Related: Conoco-Philips Pipeline Leak Threatens Wildlife Area In Alberta
Bloomberg Intelligence senior industry analyst Phillip Chladek wrote on 13 June that asset buyers are favoring the purchase of individual operations, as opposed to companies. Chladek said that approach allows those buyers to "better target businesses and geographies that align with their strategy."
Bloomberg's data indicates that in the first half of this year, approximately 42 percent of the deals that were made were assets sales.
By Lincoln Brown for Oilprice.com
More Top Reads From Oilprice.com:
Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a… More