ExxonMobil's Australia Bass Strait Assets Up For Sale Again
Zacks Investment Research | Sep 18, 2019 10:44PM ET
Exxon Mobil Corporation (NYSE:XOM) intends to divest its 50% interest in the Gippsland Basin hydrocarbon development in Australia's Bass Strait. The company currently operates in the basin with its joint venture partner BHP Group (NYSE:BHP) . Notably, this is the second time ExxonMobil is attempting to shed oil and gas operations in southeast Australia over the past three years.
The divestment is estimated to bring $3 billion to ExxonMobil, which was recently dropped from the S&P 500 Index’s top 10 companies, ending a nine-decade-long streak. The assets in focus, including offshore platforms, Longford gas plants and Long Island Point plant, are crucial as these are major suppliers of gas in the east coast market. As such, the sale can be a lucrative opportunity for domestic companies to boost their portfolio. Nevertheless, the aging fields in the southeast Australia might bear significant decommissioning costs, which can reduce its potential of fetching big bucks.
The latest move is in line with the company’s divestment plans. It intends to generate $15 billion in cash through 2025 by selling assets. This might include the divestment of stakes in oil and natural gas resources in the U.K. North Sea, along with some of its Zacks Investment Research
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