Decommissioning in the Bass Strait

The process of decommissioning offshore facilities presents complex challenges. As operator of some of Australia’s oldest oil and gas fields, Esso Australia is committed to decommissioning our Bass Strait offshore facilities safely and effectively.

We have substantial experience in safely and effectively decommissioning facilities to achieve positive outcomes across the globe, and we are excited to be part of Australia’s growing decommissioning industry.

As we continue to plan for decommissioning our non-producing facilities, we are working with relevant stakeholders to find solutions that balance environmental impacts and benefits with the needs of the community and regulatory requirements. 

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. 

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 nearly $2 billion of early decommissioning works in Bass Strait, including the plug and abandonment of 150 wells and we have commissioned seven mobile offshore assets, including the Skandi Darwin Multi-Purpose Support Vessel, Helix Q7000 semi-submersible, VALARIS 107 jack-up rig and platform based rigs; Rig 22, Rig 47, Rig 48 and the HWT600. 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

The contract for dismantling, recycling and waste management has been awarded to the Gippsland-based company, CMA Contracting, a part of the Delta Group.

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.