Decommissioning in the Bass Strait

Our ongoing role in the Gippsland Basin

Esso Australia has been a proud member of the Gippsland community for more than 50 years. During that time, we have delivered highly skilled jobs and business opportunities to the region and created significant, long-lasting economic benefits.

We are managing the decline in Bass Strait oil and gas production by streamlining our operations, transitioning from Australia’s oldest oil and gas business to a modern Australian gas company, which will continue to provide local employment opportunities for years to come.

In addition to this, we are and will continue to utilise a skilled workforce to undertake the challenging and extensive work involved in decommissioning our non-producing offshore facilities.

Completing decommissioning includes a significant scope of work throughout the decommissioning phases, including, but not limited to, well plug and abandonment, maintenance, care and preservation, preparation for removal, top-side removal and subsea facility decommissioning.

We are exploring innovative ideas to leverage our extensive energy network so that the Gippsland region can maintain its role as one of Australia’s significant energy hubs, supporting local jobs and our ongoing supply of energy which Australian’s rely on.

Our agreement with Air Liquide and BOC, that will see CO₂ extracted from Gippsland gas reused in Australian industries and our studies to determine the potential for local carbon capture and storage which will see our current facilities repurposed, and infrastructure utilised to reduce emissions and continue to enhance employment opportunities, are two examples of how we’re working to maintain our ongoing role in Gippsland. 

Maintaining our thriving ecosystem

Many of our offshore facilities have been in place for multiple decades, and over that time have developed into thriving ecosystems.

As part of our decommissioning planning, we partnered with expert researchers, academics and environmental consultants to complete a three-part comprehensive offshore environmental survey which included a detailed examination of fish and epibenthic communities, a benthic infauna identification and a sediment analysis.

As you can see in the above footage from an offshore environmental survey conducted in 2021, the majority of our structures are completely covered in marine life, including anemones and sponges.

This marine life is in turn providing a habitat and a source of food for over 55 species of fish (including those fished commercially and recreationally) and larger marine fauna such as seals and sharks.

These extensive ecosystems were observed to be very different to the surrounding seafloor and a nearby natural reef, with more reef associated species being noted on and around the structures, compared with predominantly sand associated species in the surrounding areas.

Published Research

Marine life and fisheries around offshore oil and gas structures in southeastern Australia and possible consequences for decommissioning

Contribution of offshore platforms and surrounding habitats to fish production in the Bass Strait, south-east Australia

Offshore oil and gas infrastructure plays a minor role in marine metapopulation dynamics

Offshore decommissioning horizon scan: Research priorities to support decision-making activities for oil and gas infrastructure

Identifying the best way forward

The Offshore Petroleum and Greenhouse Gas Storage (OPGGS) Act requires Esso Australia to remove all structures, equipment and property no longer used, unless it is demonstrated that an equal or better environmental outcome is achieved from something other than complete removal. The existing requirements to reduce environmental impacts and risks to as low as reasonably practicable and be of an acceptable level must also be met, consistent with the OPGGS (Environment) Regulations. 

For our steel piled jackets, we identified a number of decommissioning options and assessed each one in order to determine which approach balances the needs of other users of the sea by ensuring the safety of navigation and delivers an equal or better environmental outcome by retaining the marine ecosystems which have developed around the jackets.  

We’re proposing removing all steel platforms down to a depth of 55m below mean sea level, or at the seabed, depending on water depth at each location. This will ensure safety of navigation, and preserving the thriving ecosystems which have developed on and around the steel piled jackets.

The steel piled jackets are 98% iron and do not contain any mercury, lead, cadmium, asbestos, or Naturally Occurring Radioactive Material (NORM). The steel we are proposing to remain in place to support the ecosystem contains no hazardous or toxic material, and is similar to scuttled vessels that are designated protected marine parks.

There will be full removal of the upper sections of the platforms including the accommodation and processing facilities, known as the topsides. The remaining steel is equivalent to less than a third of the steel in the Sydney Harbour Bridge.

Decommissioning works are underway

Esso Australia has made significant progress on our well plug and abandonment work, which puts non-producing platforms in a safe state until final decommissioning occurs.

Over the last few years, we have completed over $1 billion of early decommissioning works in Bass Strait, including the plug and abandonment of 120 wells. We have successfully removed the Seahorse and Tarwhine facilities, completed plug and abandonment activities at Blackback, Kingfish B Mackerel, and Whiting wells.

Approximately 600 workers have thus far been engaged to facilitate the plug and abandonment work, whilst approximately 40 contract staff steward the care and preservation stage through our general maintenance contractor UGL. Further workforce requirements will be needed for facility preparation activities which will commence following the conclusion of plug and abandonment work.

In 2022, we entered a multi-year agreement with DOF Subsea to charter a Multi-Purpose Support Vessel which will support early decommissioning works on the Perch and Dolphin facilities, before moving onto other topside and subsea work scopes.

How the work will be executed

In 2024, we awarded a heavy lift vessel (HLV) execution contract to Allseas Marine Contractors Australia, who will utilise the Pioneering Spirit to play a pivotal role in our decommissioning activities, executing topside and jacket removal. With work commencing in 2027, the Pioneering Spirit heavy lift vessel will remove facilities offshore and transfer them to barges for loading in at Barry Beach Marine Terminal.

All dismantling activities will be completed responsibly in full compliance with environmental regulations and in a timely manner. Esso will work with the site’s key stakeholders to meet any required permits and regulatory approvals. Around 100 jobs are expected to be created with preparing for and executing onshore recycling activities.

We are excited to utilise BBMT for our decommissioning activities to continue to provide further employment opportunities and economic benefits across the region, as we have done for many years now. Many of our facilities were fabricated at BBMT and we’re pleased to provide a full cradle to grave story for these facilities, which have helped power the Australian east coast for over 50 years.

The disposal process

Esso is progressing contracting activities to select a suitably qualified and experienced contractor to undertake the dismantling, recycling, and waste management activities at Barry Beach Marine Terminal.

We are assessing the best options for each of the potential material streams, with potential options for recycling or final disposal both locally, within Australia and elsewhere.

We plan to maximise recycling of the old facilities for a second life, and minimise the amount of materials processed as waste, with an aim that 95% or more of the mostly steel material will be able to be recycled or reused from our oil and gas structures. Most of the steel will either be sent offsite in trucks, or via ship for onward transportation to recycling facilities.

Community engagement

From the outset, we identified and actively engaged with key stakeholders across the Gippsland region and continue to consult them as we work through the process. This ongoing communication has played an essential role in how we align our approach and ensure the work that we are undertaking meets the community’s needs and expectations.

Please visit our Consultation Hub, or reach out to our Consultation team at consultation@exxonmobil.com if you would like to learn more about decommissioning or our other projects.

Opportunities for the Gippsand Basin

Although the Gippsland Basin has been producing energy for more than 50 years, it remains today the largest single source of gas supply to the east coast domestic market.

The Gippsland Basin has the potential to continue supplying one third of south east Australia’s domestic gas demand through to the end of this decade. Our transition to a modern Australian gas business and the eventual decommissioning of our facilities are significant challenges that will provide local employment opportunities and contribute to the Gippsland economy for many years to come.

While we are currently undertaking activities to decommission our non-producing facilities, there will be further decommissioning works required in future, including the eventual decommissioning of facilities that today are still delivering much-needed gas to Australia.

Our offshore and onshore operating network spans over 300 kilometres across south east Australia, and includes 11 producing offshore platforms and installations which will continue to operate in the Bass Strait as we commence this initial phase of the decommissioning process, providing essential energy through the Longford and Long Island Point Plants.

We are actively working with multiple parties to ensure these valuable assets continue to be an important part of south-east Australia’s energy system and support Australia’s medium to long-term emissions reduction goals.