ExxonMobil taps JPMorgan to help sell Australian assets

Since the 1960s, Exxon has produced more than 4 billion barrels of oil from Bass Strait.

Global energy giant ExxonMobil is understood to have drafted in JPMorgan to sell its Australian oil and gas assets, thought to be worth at least $US2bn ($2.9bn).

The energy company confirmed reports in this column in June that a sale of the assets was on the agenda, saying it would be “testing market interest” for a number of assets worldwide, including operated producing assets in Australia.

In June, ExxonMobil was understood to be approaching investment banks about options for its Gippsland Basin joint venture, estimated to be worth close to $US3bn.

The thinking was always that a US-based bank was well positioned to secure a role.

ExxonMobil owns a 50 per cent interest, with resources giant BHP controlling the remainder. Questions remain over the Australian miner’s intentions.

Senior executives from ExxonMobil are believed to be arriving in Australia in the coming days as it assesses a sale.

Once JPMorgan starts work on a sales process, the investment bank will no doubt be knocking on the door of possible buyers, Beach Energy and AGL Energy.

Beach is thought to be embarking on the acquisition trail in the months ahead.

The group, which counts Seven Group Holdings as a major shareholder, is well placed after acquiring the Origin Energy offshoot Lattice Energy in 2017 for $1.58bn, consisting of various upstream oil and gas assets in Australia and New Zealand.

The Gippsland Basin Joint Venture produces oil and gas from Bass Strait and now supplies between 40 per cent and 50 per cent of east coast Australian domestic gas demand.

As part of the joint venture, Exxon also owns the Kipper gas field in the same area, with its 30 per cent interest estimated to be worth about $US800m.

ExxonMobil and BHP jointly ran a sale process for only its Bass Strait oil assets in 2017, but the assets were retained.

At that time, ExxonMobil and BHP advertised the assets as an opportunity to acquire a full interest in 12 offshore production licences and one retention lease covering 2370sq km.

In their heyday, the oil assets were seen as being worth hundreds of millions of dollars, but at that time were considered to be of limited value due to high remediation costs.

Since the 1960s, Exxon has produced more than 4 billion barrels of oil from Bass Strait.

One of the parties that engaged with the sellers at that time was Canada’s Vermilion Energy, while China’s Fosun was thought to have kicked the tyres.

Buyers would be eager to pay up this time around for the gas assets.

The sale comes as Seven Group embarks on a sale of a stake in its Crux project, while Woodside Petroleum divests its interest in the Scarborough project in Western Australia.