BHP Billiton Petroleum (Bass Strait) and ExxonMobil’s affiliate Esso Australia Resources will separately market their share of gas produced under the Gippsland Basin joint venture (GBJV) from 1 January 2019.
The development comes after the companies provided court enforceable undertakings to this effect in the wake of increasing pressure from the Australian Competition and Consumer Commission (ACCC) on the grounds of competition concerns.
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The issue initially came to light during the ACCC’s 2015 East Coast Gas Inquiry, following which the regulatory authority investigated the effect of joint marketing arrangements between the companies during the period from late 2013 to 2015.
ACCC chairman Rod Sims said: “The GBJV is the largest producer of gas in the southern states, with production expected to reach a record level of 330PJ in 2017.
“Wholesale gas buyers in this region have become highly reliant on the GBJV as their primary source of supply.
“The ACCC was concerned that the joint marketing arrangements were likely to have resulted in a substantial lessening of competition in the market for the supply of gas to buyers in the southern states.
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By GlobalData“We believe that competition in this market was negatively affected by the elimination of independent rivalry between BHP and Esso.”
The watchdog believes the decision will accrue benefits arising out of competition between BHP and Esso, operating separately, to customers in the future.
Established in 1964, the GBJV is a 50/50 joint venture between BHP and Esso engaged in the production of crude oil and natural gas at the offshore fields in the Gippsland Basin in Victoria.
Through the joint venture, the companies have been marketing gas to customers since 1969.
