Origin dumps NT plan
Origin Energy is abandoning plans to frack for gas in the Northern Territory’s Beetaloo Basin.
Origin has announced it will sell its exploration interests in the region to Tamboran Resources and its shareholder, Bryan Sheffield, for $60 million, subject to the Northern Territory government’s approval.
The company also says it will divest from its remaining “upstream” gas exploration permits, following uncertain and expensive efforts to drive the projects into the production phase.
Origin expects to lose somewhere between $70 and $90 million as a result of the move, but has made deals to buy gas from producers if production ramps up in the Beetaloo Basin.
Origin chief executive Frank Calabria says the company will instead concentrate on a “refreshed strategy” to “grow cleaner energy and customer solutions, and deliver reliable energy through the transition”.
“We believe gas will continue to play an important role in the energy mix and it remains a core part of our business,” he said in a statement to the ASX.
“Notwithstanding the prospectivity of any of these permits, typically the experience in progressing these types of projects is that the exploration and appraisal phase can be uncertain, and it can be capital intensive to bring projects into production.
“Ultimately, we believe Origin is better placed prioritising capital towards other opportunities that are aligned to our refreshed strategy.”
The previous federal government hailed the Beetaloo Basin as part of its so-called “gas-led recovery” from COVID-19, giving out millions of dollars in grants to fast-track exploration.
But it has also been the site of an ongoing battle by environmental groups against development of the basin due to concerns about greenhouse gas emissions and risks to water sources.
Northern Territory Chief Minister Natasha Fyles says Origin simply made a “business decision” that does not reflect the Beetaloo's viability.
“We certainly are as a government moving towards renewables,” she said.
“But we need to have a sustainable energy supply so that we can transition as a territory and a nation across to renewables.”