Australia’s domestic energy sector is about to go through one of the most dramatic changes in its history with a single company set to have control of key gas operations on the east and west coast.

Exxon and then joint venture partner BHP (ASX: BHP) became the leading Australian gas providers when they discovered the Barracouta field in the offshore Gipplsland Basin in April 1965, putting Australia’s oil and gas industry on the world map.

Just over 60 years later, ExxonMobil is handing over the daily management of its giant Bass Strait assets to North West Shelf operator Woodside Energy (ASX: WDS).

Growing Victorian Presence

Woodside, which recently celebrated its 70th anniversary, has dominated energy production on the opposite side of the country, finalising a company-changing merger with BHP’s petroleum business in June 2022 that provided it with initial access to the Bass Strait fields.

Under the new agreement, approximately 600 ExxonMobil staff will transfer to Woodside, with completion of the operational change expected in 2026, subject to regulatory approvals.

The respective equity interests of the two companies’ Bass Strait assets and current decommissioning plans and provisions will remain in place.

Bass Strait Rejuvenation

Analysts have suggested Woodside has the capacity to rejuvenate the Bass Strait assets at a time when gas supply to the east coast markets has been in decline, with Woodside reportedly having already identified four potential development wells that could deliver up to 200 petajoules of sales gas to the market.

Woodside chief operating officer Australia Liz Westcott said the transfer of operatorship reinforces the company’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,” she 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.”

Major East Coast Supplier

ExxonMobil Australia chair Simon Younger confirmed production from the Bass Strait currently meets approximately 40% of Australian east coast gas demand.

“After operating the Gippsland Basin joint venture for more than 50 years, we are proud to be handing over the reins and transitioning our highly experienced Bass Strait workforce to our valued partner Woodside, a world-class operator,” Mr Younger said.

Once the agreement goes through a range of approvals, 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.