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Exxon contests Australia’s industry levy for Timor Sea oil field clean-up

Exxon Mobil Corp (XOM.N) on Thursday protested at Australia’s move to hit the oil and gas industry with a levy to cover the cost of removing facilities at an oil field off northwest Australia after a small firm that owned the project collapsed.

Exxon said it had proven that it could safely decommission facilities around the world, had the financial backing to do so, and shouldn’t have to help cover the costs of other companies unable to meet their obligations.

“Therefore, it was disappointing to see the federal government announce the introduction of an industry levy to pay for the decommissioning of the Laminaria-Corallina oil fields and associated infrastructure,” Exxon said in its first public comments on the plan announced on May 12. read more

The industry levy comes on top of huge decommissioning costs that Exxon and its partner BHP Group (BHP.AX)(BHPB.L) face this decade in the Bass Strait off southern Australia, where output at their Gippsland Basin Joint Venture is rapidly depleting.

Exxon said it has spent more than A$300 million ($232 million) on plugging and abandoning a number of wells in the Bass Strait that are no longer producing and will spend over A$150 million in the next two years on further plug and abandonment work.

The oil and gas industry are working with the government to work out how the levy will be calculated to cover the decommissioning costs at the Laminaria-Corallina offshore fields, which Credit Suisse analyst Saul Kavonic said could top A$1 billion if all of the facilities are required to be removed.

($1 = 1.2940 Australian dollars)

Our Standards: The Thomson Reuters Trust Principles.

Read More: Exxon contests Australia’s industry levy for Timor Sea oil field clean-up

2021-05-19 20:33:00

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