The Morrison government has made increasing gas production a priority of the nation’s post-pandemic economic recovery.
Australian Manufacturing Workers Union organiser Steve Dodd said ExxonMobil’s decision was being broadly welcomed by the workforce.
“They no longer have the ‘for sale’ sign up,” he said. “It gives our members some permanency, they won’t have to reapply for their jobs with some new employer.”
Credit Suisse oil and gas analyst Saul Kavonic said one deterrent for prospective buyers would have been the looming liabilities for decommissioning the ageing assets and heightened regulatory scrutiny from the federal governemnt. The sale was expected to be closely watched after North Oil & Gas bought a field in the Timor Sea with $156 million in abandonment liabilities, but went into voluntary administration last year
“The long and the short of it is that it was always going to be a pretty challenging asset to sell, particularly because of the large abandonment liability associated with it,” Mr Kavonic said
“Exxon might be testing the government not to impose such strict requirements.”
Mr Kavonic added that the virus -driven oil price crash, which has dampened the demand and price outlook for oil and natural gas, may have also led to lower offers for the assets than Exxon was prepared to accept. “It’s quite possible that Exxon believes in a more robust pricing outlook,” he said.
Private equity, ASX-listed Beach Energy and AGL Energy, Australia’s biggest power and gas supplier, have been speculated as potentially interested purchasers of a stake in the joint venture.
BHP is separately seeking a buyer for its 50 per cent stake in the joint venture. A BHP representative on Friday said the company would continue to assess its divestment plans in the Bass Strait.
“This is a complex process and will take time, and we will consider the implications of recent announcements,” the spokesman said. “While that work is ongoing, we will continue to work closely with the operator to deliver gas and liquids to customers, and generate value for the community and our shareholders.”
BHP chief executive Mike Henry in August said the mining giant planned to continue to invest in its petroleum assets, recognising the opportunity to grow value in the coming years. But it would adopt a “balanced approach” to the portfolio, he said.
“We will pursue targeted divestments of later-life assets – something we have a strong track record in. And this includes an intended exit from Bass Strait,” Mr Henry said at the time.
Business reporter for The Age and Sydney Morning Herald.