ExxonMobil has announced plans to sell its Gippsland Basin upstream portfolio as it continues to refine its global portfolio.

Wood Mackenzie research director Angus Rodger says this is a major development on the Australian oil and gas front.

“ExxonMobil putting its entire Gippsland Basin upstream portfolio up for sale represents big news for the Australian upstream and gas market,” Mr Rodger said.

“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.”

In 1965 an Esso/BHP Billiton joint venture drilled Australia’s first offshore well and discovered the Barracouta gas field in Bass Strait.

 Two years later Kingfish was discovered, the first offshore oil field, which to this day remains the largest oil field ever discovered in Australia.

These, and other subsequent world-class discoveries in Bass Strait, off Victoria’s Gippsland coast, have led to significant changes to Australia’s industry and economy.

Massive infrastructure costing billions of dollars has been built to develop, produce and process the crude oil and gas, which is used to power industry, fuel vehicles, heat homes and manufacture products in Australia and overseas.

There are now 23 offshore platforms and installations in Bass Strait, including the new Marlin B platform and Kipper subsea wells, which feed a network of 600km of underwater pipelines and keep the oil and gas flowing, 24 hours a day.

To date, more than four billion barrels of crude oil and around eight trillion cubic feet of gas have been produced. And our future remains bright – with Bass Strait continuing to supply vital energy to Australians for more decades to come.