Australia's Woodside Energy to take operatorship of ExxonMobil's Bass Strait assets

Australian oil exploration and production company Woodside Energy will taken over operatorship of ExxonMobil Australia's Bass Strait assets to develop additional gas resources following an agreement, it said in a statement on July 29.

As part of the agreement, Woodside will assume operatorship of the offshore Bass Strait production assets, the Longford Gas Plant, the Long Island Point gas liquids processing facility, and associated pipeline infrastructure.

The Bass Strait assets include the Gippsland Basin Joint Venture and the Kipper Unit Joint Venture. Woodside and ExxonMobil Australia each hold a 50% participating interest in GBJV and a 32.5% participating interest in KUJV.

Natural gas production from the Bass Strait assets supplies around 40% of Australian east coast domestic gas demand.

As operator, Woodside will take on the responsibility for asset planning and execution activities, targeting further production and reliability improvements. The transition is expected to complete in 2026, subject to conditions including obtaining regulatory approvals.

ExxonMobil's Bass Strait workforce will also transfer to Woodside. Woodside and ExxonMobil's equity interests in the assets and current decommissioning plans and provisions remain unchanged.

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

"The agreement also creates flexibility to realise future development opportunities that meet Woodside's capital allocation framework," it added.

Woodside has identified four potential development wells that could deliver up to 200 Pj of sales gas to the market, it said.

Under the agreement, Woodside can solely develop these opportunities through the Bass Strait infrastructure, subject to further technical maturation and a final investment decision, according to the company.

ExxonMobil Australia Chair Simon Younger said the company remains committed to providing reliable supplies of gas to its customers in Australia.

"We look forward to working with Woodside as it continues to maximise Gippsland Basin production," Younger said.

Australia is among the world's largest LNG exporters. Its LNG shipments reached 82 million mt in 2024, surpassing 81.1 million mt in 2023 and the previous record of 81.3 million mt in 2022, according to EnergyQuest, a domestic consulting company.

In the past, growth has been somewhat constrained by unfavorable gas policies and domestic interventions, such as DomGas and the Australian Domestic Gas Security Mechanism, according to industry sources. The development of domestic gas resources and investments in the sector are key to meeting domestic energy needs and enhancing overseas supplies, the sources added.