Page 15 - GLNG Week 32

GLNG AUSTRALASIA GLNG
Neptune eyes Eni’s Australian assets
INVESTMENT
Eni’s prized assets include a 10.99% stake in Darwin LNG and the plant’s feedstock field Bayu-Undan.
NEPTUNE Energy is reportedly the latest party to express interest in buying Italian major Eni’s Australian oil and gas portfolio.
Neptune will join Macquarie Capital and Beach Energy as frontrunners in the chase to secure the assets, local daily The Australian reported on August 6, noting that other poten- tial suitors included Santos, Cooper Energy and a range of infrastructure investors.
Eni’s prized assets include a 10.99% stake in Darwin LNG and the plant’s feedstock field Bayu-Undan and its wholly owned Blacktip nat- ural gas field and attached Yelcherr processing plant. Eni also owns stakes in four exploration licences, including the Joint Petroleum Devel- opment Area in the Timor Sea and the unde- veloped Evans Shoal gas field, which could be a potential backfill for Darwin LNG.
Reports emerged in May that the Italian major wanted to sell its Australian assets to raise cash amid the coronavirus (COVID-19) driven global economic downturn, which has seen international oil and gas prices collapse.
Eni is understood to be working with
investment bank Citi on the sale, which will be held over two rounds and is expected to raise an estimated $700-900mn. Blacktip is understood to account for the bulk of this valuation, given that the field has a long-term gas supply agree- ment with domestic buyers.
The field’s attraction lies in its long-term supply contract, which helps to insulate it from global oil and gas price volatility. At the same time, however, The Australian said industry observers viewed Eni’s 15-year supply contract with the Northern Territory government-owned Power and Water Corp. as having limited upside, which could make growing earnings a more challenging prospect.
Australia’s upstream sector is going through a shake-up amid the collapse in oil prices ear- lier this year, with developers reining in capital expenditure. However, with the industry hav- ing just gone through a painful period of write- downs, investors are once more looking for acquisition opportunities. Woodside said this week that it was looking for suitable targets now that the worst was likely over for the sector.™
Woodside mulls acquisition opportunities
INVESTMENT
Woodside said in June that it was interested in Chevron’s planned sale of its one-sixth stake in the North West Shelf (NWS) LNG project.
AUSTRALIA’S Woodside Petroleum has said it is looking to acquire distressed oil and gas assets after reporting a 28% slide in its first-half adjusted profit.
Woodside said its underlying net profit amounted to $303mn in the first six months of the year, down from the $419mn it reported in the same period of 2019.
The company reported a half-year net loss of $4.07bn as a result of a post-tax impairment loss of $3.92bn that it announced on July 14.
Production climbed to a record 50.1mn bar- rels of oil equivalent from 39mn boe in the same period of 2019. Lower oil and gas prices, how- ever, saw operating revenue decline to $1.91bn from $2.26bn a year earlier.
Woodside CEO Peter Coleman said his com- pany was interested in either projects close to existing assets or stakes in fields that were close to or in production.
While noting that the conditions created by the coronavirus (COVID-19) pandemic and the global oil and gas oversupply were the most difficult “I’ve seen in nearly four decades in the industry”, Coleman was upbeat about the future.
“We’re optimistic that the worst of the sup- ply and demand shocks are behind us,” he told
analysts. “We’re clearly scanning the landscape very closely looking for opportunities.”
Woodside said in June that it was interested in Chevron’s planned sale of its one-sixth stake in the North West Shelf (NWS) LNG project. Woodside operates the project, in which BHP, BP, Royal Dutch Shell and a joint venture con- sisting of Japan’s Mitsubishi and Mitsui & Co are also partners.
The NWS partners signed an initial deal in 2018 on processing gas from Woodside’s Browse development under a tolling agree- ment, but there has been no sign of a final deal on that front, with repeated reports of mount- ing friction between the partners. Indicative bids for the NWS project are due by the end of this year.
Woodside is also weighing up whether to exercise its right to match Lukoil’s $400mn offer for Cairn Energy’s 40% stake in the Rufisque, Sangomar and Sangomar Deep (RSSD) project off Senegal. If Woodside does pre-empt the sale its stake will climb from 35% to 75%.
Coleman told Reuters that his company was also seeking legal advice on whether Lukoil’s par- ticipation in the project could expose the part- ners to US sanctions against Russia.™
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