Woodside takes on ExxonMobil Bass Strait assets

WOODSIDE may have abandoned plans for a major hydrogen project in the United States, but it is throwing its weight behind its Australian operations.

It is to assume operations of ExxonMobil’s Bass Strait assets which it said has the potential to unlock additional gas resources.

The move strengthens Woodside’s footprint in Australia and means it will assume operations of the offshore Bass Strait production assets, the Longford Gas Plant, the Long Island Point gas liquids processing facility and associated pipeline infrastructure.

A Woodside statement to the Australian Stock Exchange said Woodside and ExxonMobil’s equity interests in the assets and current decommissioning plans and provisions remain unchanged.

“As operator, Woodside will take on the responsibility for asset planning and execution activities, pursuing a value maximisation strategy that targets further production and reliability improvements.

“This strategic move combines Woodside’s existing global operating capabilities with ExxonMobil’s highly experienced Bass Strait workforce who will transfer to Woodside, further strengthening Woodside’s overall operating expertise.

“Operatorship of a larger group of assets in Australia will create economies of scale which are expected to realise over US$60 million in synergies for Woodside from the Bass Strait after deduction of transition and integration costs.

“The agreement also creates flexibility to realise future development opportunities that meet Woodside’s capital allocation framework.”

The statement said Woodside has identified four potential development wells that could deliver up to 200 petajoules of sales gas to the market, which Woodside can solely develop under the agreement.

Woodside EVP and COO Australia, Liz Westcott, said the rationale for the agreement is compelling and the transfer of operatorship reinforces Woodside’s position as Australia’s leading energy company.

“As a proudly Australian company, Woodside supports essential domestic energy needs in both Western Australia through the North West Shelf, Pluto and Macedon operations, and on the east coast through its equity participation in Bass Strait,” Ms Westcott said.

“Taking operatorship of Bass Strait demonstrates Woodside’s continued commitment to meeting Australia’s domestic energy demand while maximising the value of existing infrastructure,” she said.

The move follows Woodside’s completion of its Louisiana LNG sell-down to infrastructure investor Stonepeak.

Its quarterly update last week also welcomed key approvals for the North West Shelf extension, reinforcing long-term supply capability and signalling continued engagement with federal regulators.

Woodside has also reported a blowout in the budget for decommissioning of old oil and gas fields which could cost $US500 million.