BHP to Sell Stake in Exxon-led Bass Strait Joint Venture

Sonali Paul
Tuesday, August 18, 2020

BHP Group said on Tuesday it plans to sell its 50% stake in the Australian Bass Strait oil and gas venture as it seeks to focus on its higher-value petroleum assets.

The Bass Strait joint venture is co-owned and operated by Exxon Mobil Corp, which has also put its 50% stake up for sale. Analysts have estimated the 50% stake could fetch up to $3 billion.

The Bass Strait oil and gas fields off Australia's southeastern coast have produced more than 4 billion barrels of crude oil and about 8 trillion cubic feet of gas over the past 50 years and now face a steep decline.

"We continue to optimize our petroleum portfolio through the exit of later life assets, including an intended exit from Bass Strait," BHP said in its annual results statement.

At $1.1 billion, the Bass Strait was the biggest single contributor to BHP's petroleum revenue in the year to June 2020, but that was down from a $1.6 billion annual contribution a decade ago.

Analysts said BHP might be able to sell its stake ahead of Exxon as the Anglo-Australian company's interest might attract more bidders as it is not the operator of the field.

However, Wood Mackenzie analyst Daniel Toleman said not knowing who the operator is going to be is a "major risk".

"The main impediment to this deal is the abandonment liabilities, which are significant," Toleman said, referring to the costs of decommissioning offshore oil and gas platforms. He did not give an estimate.

Regulators will likely watch the sale closely after a small company, North Oil & Gas Australia (NOGA), bought an aging field in 2016 which came with $156 million in abandonment liabilities, but then went into voluntary administration last year. The decommissioning costs for the Bass Strait assets would be many times higher than that.

"Abandonment costs and heightened regulatory scrutiny over any buyer's ability to meet them in the wake of the NOGA debacle, could drastically limit the pool of buyers for Bass Strait interests," said Credit Suisse analyst Saul Kavonic.

(Reporting by Sonali Paul; Editing by Muralikumar Anantharaman and Susan Fenton)

Categories: Energy Industry News Activity Australia/NZ

Related Stories

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

French Oil Major Acquires Interests in Multiple Blocks in Southeast Asia

Fugro Expands Geotechnical Testing Capabilities in Indonesia

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Scarborough FPU's Topsides and Hull Come Together in Major Engineering Feat (Video)

Woodside Inks Long-Term LNG Supply Deal with China Resources

Current News

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com