Origin may list O&G assets to raise A$1b

SYDNEY: Australia’s top energy retailer Origin Energy Ltd plans to sell some oil and gas producing assets in a listing tipped to fetch A$1 billion (RM3.3 billion), cutting debt and joining its main rival in reducing exposure to upstream production.

The move by new chief executive officer Frank Calabria sets up Australia’s biggest initial public offering (IPO) since 2014 and underscores the desire of the country’s energy firms to refocus on their more stable retail gas and power businesses.

It also gives a sense of the speed at which Calabria plans to put his stamp on the company he took over in October. A month before Calabria started, Origin chairman Gordon Cairns said the company had no plans to demerge.

“The decision is my decision but ... it is also something we’ve done quite bit of work around,” Calabria told journalists yesterday, noting that his predecessor, Grant King, planned to sell A$800 million of assets by next year to cut debt.

Origin will keep a stake in Australia Pacific LNG, a nine milliontonnes-a-year project co-owned by ConocoPhillips and China’s Sinopec off Australia’s east coast, which the company cannot spin off until it has met all of its project finance commitments, expected in mid-2017.

Origin did not say how much it hoped to raise in the IPO, but its shares rose as much as five per cent, hitting their highest intraday level in a year, as investors took a positive view of the simplified company structure. The broader market was up 0.8 per cent.