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ExxonMobil and BHP Billiton have decided to abandon the 20-month-long sales process of their joint ageing oil assets offshore Australia and will keep ownership and operation of the fields and associated infrastructure, the companies said on Friday, in what analysts see as a result of the higher oil prices compared to when the sales process was launched in mid-2016.
The two companies have jointly decided not to proceed with the sale of the assets of their decades-old Gippsland Basin Joint Venture, a spokesperson for BHP Billiton said in an email, as carried by Bloomberg.
“After consideration of a range of options, we have currently decided to retain ownership and operation of these assets,” Exxon’s Australian unit, Esso Australia, said.
The Gippsland Basin Joint Venture (GBJV), in which Esso Australia Pty Ltd and BHP Billiton Petroleum (Bass Strait) Pty Ltd each hold 50 percent, started in 1964, with Esso Australia as the operator for oil and gas exploration off Victoria’s Gippsland coast. The joint venture drilled its first well in February 1965. Between 1967 and 2015, the joint venture produced 54 percent of Australia’s crude oil and hydrocarbon liquids, according to a report on Exxon’s website by consultancy ACIL Allen.
Currently, there are 23 offshore platforms and installations in Bass Strait, according to Exxon.
“The announcement is quite significant because Esso and BHP were planning to sell out of some of their older oil producing assets in Bass Strait,” Graeme Bethune, chief executive at Australian energy advisory firm EnergyQuest, told Australia’s ABC.
“But the fact they’re not wanting to do that now probably reflects in particular the strength of the oil price,” Bethune said, noting that the companies were also working to reinvest in their gas assets in Bass Strait, “so it really does show a turnaround from where we were a couple of years ago.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.