* Decommissioning offshore field could cost over A$1 bln -
analyst
* Owner went bust 3 yrs after buying field from Woodside,
Talisman
* Industry working with government to calculate levy burden
* Oil majors could be made to pay more than field's
operators
(Recasts with Chevron, sources' comments)
By Sonali Paul
MELBOURNE, May 20 (Reuters) - U.S. oil majors Exxon Mobil
Corp and Chevron Corp on Thursday branded
Australia's proposed industry-wide levy to cover the cost of
decommissioning an offshore oil field, which neither has had any
stake in, as "arbitrary" and "disappointing".
The planned levy to remove facilities and plug abandoned
wells at an oil field in the Timor Sea, off the northwest coast,
could be a precedent setting move with significant implications
for extractive industries in Australia.
The government decided to impose the levy as it did not want
taxpayers to have to cover the cost of rehabilitating the
Laminaria-Corallina field in the Timor Sea after the owner,
Northern Oil & Gas Australia (NOGA), went into liquidation in
2019.
NOGA bought the field from Woodside Petroleum and
Talisman Energy in 2016.
Credit Suisse analyst Saul Kavonic said decommissioning
costs could top A$1 billion if all of the facilities are
required to be removed.
Resources Minister Keith Pitt's spokesman said talks with
industry representative were underway over how the levy will be
applied to Australia's oil and gas producers.
Two sources familiar with those talks have said one option
under consideration would be to calculate companies'
contributions based on their production volumes.
That would mean international majors like Royal Dutch Shell
and Chevron Corp, the biggest producers in
Australia, would bear a bigger share of the cost than companies
who previously owned the Laminaria-Corallina field.
"Chevron Australia is committed to working with the
government on a decommissioning policy framework that would
effectively preclude the need for this type of ad hoc, arbitrary
action," a Chevron spokesman said.
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 last week.
Shell Australia declined to comment.
The industry levy comes on top of huge decommissioning costs
that Exxon and its partner BHP Group face
during the coming 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 wells in the Bass Strait
that are no longer producing and would spend more than A$150
million in the next two years.
Exxon tried to sell its 50% stake in the Gippsland Basin
Joint Venture last year but pulled the sale in November, shortly
after Resources Minister Pitt wrote to Exxon Chief Executive
Darren Woods raising concerns about decommissioning obligations.
($1 = 1.2940 Australian dollars)
(Reporting by Sonali Paul; Editing by Tom Hogue, Kenneth
Maxwell & Simon Cameron-Moore)