Sydney-based petroleum company Roc Oil, which is owned by China’s Fosun, is expected to be among parties interested in some of the Australian oil and gas assets owned by Italy’s Eni, say sources.
Roc Oil Company has a presence in China, Southeast Asia and Australia and operates across the full range of upstream business activities, from exploration and appraisal to development and production delivery.
It is thought that Roc Oil’s interest lies with Eni’s Blacktip gas field project, 110km off the northern coast of Australia in the Timor Sea’s Bonaparte Basin. The field is fully owned by Eni.
Market experts say that a move by Roc Oil on that asset makes sense.
Fosun was understood to have lost money on its Roc Oil investment and last year drove down costs. It is averse to exploration assets and prefers mature oil assets where it can secure the cashflow.
Beach Energy has a similar strategy in that it prefers cash-flow assets and likes to drive down costs and make more them more efficient.
Eni recently hired investment bank Citi to explore a sale of its Australian assets.
Other groups that were thought to be possible buyers include Beach Energy, Santos and APA Group.
Some say Roc Oil is one of the few parties with the capability to operate the project, which started in 2009, and Eni is the logical owner.
Gas produced from the field is supplied to the Northern Territory-based utility provider Power Water Corporation under a 25-year agreement and the field provides gas to generate electricity for the Northern Territory locations.
Recoverable reserves of the field are estimated at 150 million barrels of oil equivalent.
The Blacktip gas project is estimated to worth about $500m and other small assets are thought to be worth about $50m.
Eni also owns a stake in Darwin LNG, estimated to be worth about $250m.
Overall, market analysts estimate the portfolio could be worth $750m and $1bn.
The thinking is that the $US55.6bn supermajor oil company that operates in 79 countries has considered the Australian market non-core for some time, taking cue from ConocoPhillips’ stake sale in the Darwin LNG project to Santos.
Eni’s projects are not seen as profitable based on the current oil price, which crashed to low levels earlier in the year at the time of the COVID-19 global outbreak.
Attempts have been made to spin off the Blacktip project’s infrastructure, with the hope of enticing an infrastructure buyer, such as Queensland Investment Corporation, IFM or APA, to join forces with an operator to buy the asset. The challenge, though, is that few parties are thought to have the capability to operate the asset. It is thought that other buyers could emerge for other parts of the portfolio.
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