Exxon Mobil puts offshore Australian assets up for sale along with other regions

  • Sep 18, 2019
  • Atascocita Observer

Exxon Mobil is putting some of its offshore Australian assets up for sale as it continues to consider selling off many of its mature offshore assets around the world - from the Gulf of Mexico to the North Sea.

Exxon Mobil is putting its oil and gas-producing Gippsland Basin assets on the Australian east coast up for sale, just weeks after it was reported Exxon was finalizing a sale of its Norwegian North Sea portfolio. Exxon also is considering selling assets in the U.S. Gulf and the United Kingdom portion of the North Sea.

"ExxonMobil will be testing market interest for its upstream operated producing assets in Australia, as part of an ongoing evaluation of its assets worldwide," a spokeswoman said. "It is important to note that no agreements have been reached and no buyer has been identified."

Exxon Mobil has placed most of its oil-producing development emphasis on the booming Permian Basin in West Texas and New Mexico, as well as the emerging deepwater market off the coast of the tiny South American nation Guyana.

Wood Mackenzie research director Angus Rodger said the likely Gippsland sale is a big deal in the Australian market and will likely attract a small group of domestic buyers.

"As a pivotal producer on the east coast, the assets play a key role in supplying gas to Australia's biggest market," Rodger said. "That said, these are complex, mature assets. We believe this will lead to a far smaller pool of realistic buyers, who will have to get comfortable with the age of the assets, declining production and significant decommissioning liabilities."

The news comes after it was reported Exxon Mobil is finalizing the likely sale of its Norwegian North Sea assets to a Norway firm backed by Italy's Eni and private equity funding for up to $4 billion. A sale would end Exxon's 125-year history in Norway.

RELATED: Exxon Mobil reportedly selling Norwegian North Sea assets for $4B

The expected sale continues the exodus to the top American energy firms from more mature North Sea oil production in order to focus on U.S. shale and other international prospects. Exxon has for months indicated its interest in selling those assets.

Exxon is in exclusivity talks to sells its Norwegian North Sea assets to Vår Energi, a joint venture in which Eni owns a nearly 70 percent stake. Norway's biggest private equity firm, HitecVision, holds the remaining 30 percent.

Exxon Mobil also is facing the challenge of the Netherlands deciding to phase out production of the Groningen gas field by mid-2022, eight years earlier than previously planned. Once Europe's largest gas field, Groningen is a 50-50 joint venture between Exxon and Royal Dutch Shell and its phase out will cut into both companies oil and gas production volumes.