US major ExxonMobil has hung a "for sale" sign on oil assets which are currently producing 19,000 b/d in the Bass Strait off southeastern Australia, a company spokesman said Wednesday.
The Bass Strait operations are owned and operated by ExxonMobil through the Gippsland Basin joint venture, which was Australia's first offshore oil and gas production project.
The joint venture, held 50% each by ExxonMobil and Anglo-Australian resources giant BHP Billiton, has produced more than 4 billion barrels of crude and 8 Tcf of gas since operations began in 1965.
The Bass Strait is now mainly a gas producer, supplying nearly 40% of demand in eastern Australia. Oil production from the region has been in natural decline since peaking at more than 500,000 b/d in the 1980s.
"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 ExxonMobil spokesman said. "We are currently exploring opportunities to market some of the offshore Gippsland Basin fields, licenses and associated offshore infrastructure to third parties."
The spokesman said both ExxonMobil and BHP Billiton's holdings in the joint venture would be marketed.
The fields being put on the block include Perch, Dolphin, Seahorse, Tarwhine, Kingfish A, Kingfish B, West Kingfish, Fortescue, Halibut, Cobia, Mackerel, Blackback and Flounder.
"We are seeking to identify third parties with proven experience and strength to operate and capture the remaining potential in these licenses," the spokesman said.
JV TO RETAIN KIPPER TUNA TURRUM
The Gippsland Basin joint venture will retain ownership and operation of the remaining offshore fields and onshore facilities, which include the $4.5 billion Kipper Tuna Turrum project, the largest oil and gas development on Australia's east coast.
Kipper Tuna Turrum has an estimated 1.6 Bcf of gas and 140 million barrels of liquids. The Turrum field has been producing through the Marlin B platform since October 2013 and is expected to start pumping gas later this year after the commissioning of a new gas conditioning plant at the joint venture's onshore processing facility at Longford in Victoria.
Crude oil from the Bass Strait offshore fields is transported via pipeline to Longford.
ExxonMobil last August committed A$400 million to replacing a 187-km (116 mile) crude pipeline which supplies Longford.
According to a report in The Australian newspaper, US oil services company Schlumberger has spruiked the assets, which it said had "substantial infill drilling and workover opportunities."
The operations also had "a large exploration and development prospect inventory that could extend productive life well into the future," The Australian cited Schlumberger as saying in a note.
The Australian Financial Review separately quoted an unidentified source as saying the assets could fetch "into the billions of dollars."
Latest figures from the Office of the Chief Economist in the Australian government's Department of Industry, Innovation and Science, released in May, showed the entire Bass Strait region, including the Gippsland, Bass and Otway basins, produced 1.261 million barrels (40,677 b/d) of liquids in March, down slightly from 1.298 million barrels in February.
The region accounted for just under 14% of Australia's total crude oil and condensate output of 290,600 b/d for the month.
