Following ExxonMobil's announcement on its sale of its Gippsland Basin upstream portfolio, Wood Mackenzie research director, Angus Rodger, has provided the following comment:
"ExxonMobil putting its entire Gippsland Basin upstream portfolio up for sale represents big news for the Australian upstream and gas market. As a pivotal producer on the east coast, the assets play a key role in supplying gas to Australia’s biggest market. As such, we would expect interest to be strong from domestic players that wish to gain greater exposure to rising gas prices, of which there are a significant number."
"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 fact that a previous effort to offload the Gippsland oil assets failed due to uncertainty over abandonment costs highlights how big an issue it will be, but also suggests any new operator would look to extend and increase production from the portfolio to delay the onset of decommissioning spend."
Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/19092019/wood-mackenzie-comments-on-exxonmobils-sale-of-gippsland-basin-upstream-assets/
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