So will BHP find a buyer for its 50% stake in the Bass Strait oil and gas joint venture after Exxon Mobil called off its sale process because of a lack of serious buyers?
BHP representative told the media on Friday that the company would continue to assess its divestment plans in the Bass Strait.
BHP revealed mid-year that it will continue to focus on oil and gas (while selling off thermal coal) and going deeper into minerals in demand from renewables and electric vehicles – such as copper and nickel.
So its big offshore interests in the US Gulf of Mexico and around Trinidad and Tobago will be retained, but the half interest in the Bass Strait was not wanted and a buyer or buyers were being sought.
ExxonMobil had its sale plans well underway for a year but on Friday ended that attempt and will now reassess the process and future of the declining oil and gas fields.
ExxonMobil reportedly told its Bass Strait workforce on Friday that it had decided to retain the assets following an “extensive market evaluation”.
“We believe Gippsland Basin and the Kipper unit are more valuable as part of our portfolio and we will continue to operate rather than divest,” an Exxon spokesman later told the media.
Private equity and local companies, Beach Energy and AGL Energy were thought to have been interested.
Global oil prices have recovered from the March-April sell-off and are around $US45 to $US47 a barrel – they are up 27% in November and could go higher if OPEC and Russia decide to maintain their existing production cap past the cutback scheduled to start January 1.
But these are short term moves – the medium to longer-term outlook for oil and gas is weak given the continuing rise in renewables such as solar and wind power.
The fields are past their prime – some have been producing since the 1970’s.
Meanwhile, Treasury Wine Estates is expected to release an update today on the impact of China’s doubling of duties and taxes on Treasury’s wine exports.
In a statement to the ASX asking for the halt (after the shares had fallen 11.25% to $9.23 in the aftermath of the Chinese government announcement, TWE said it would be assessing the impact and would then update the market.
“TWE is reviewing the details of the provisional measures as a matter of urgency in order to update the market,” the statement said.
