Page 12 - AsianOil Week 15

AsianOil OCEANIA AsianOil
Santos agrees to Barossa stake sale with JERA
FINANCE & INVESTMENT
AUSTRALIAN developer Santos has agreed to sell a 12.5% stake in the Barossa natural gas project offshore the Northern Territory to Japan’s JERA.
Santos said on April 16 that the two compa- nies had signed a letter of intent (LoI), adding that the agreement advanced Barossa’s develop- ment as backfill for Darwin LNG. JERA already has a 6.1% interest in the gas export terminal. The value of the deal was not disclosed.
Santos’ managing director and CEO, Kevin Gallagher, said: “Santos continues to build align- ment between the Darwin LNG and Barossa joint ventures. Following completion of the ConocoPhillips acquisition and the sell-downs to JERA and SK E&S, Santos will hold a 43.4% interest in Darwin LNG and a 50% interest in Barossa.”
The independent agreed in October 2019 to buy ConocoPhillips’ operated interests in Dar- win LNG, the Bayu-Undan gas field as well as the Barossa and Poseidon offshore gas projects. Santos said at the time that it had agreed to pay $1.39bn for the assets as well as a $75mn con- tingent payment subject to a final investment decision (FID) on Barossa.
ConocoPhillips owns a 56.9% stake in Dar- win LNG and Bayu-Undan, 37.5% of Barossa and operates the Poseidon exploration project with a 40% stake.
Santos said on March 12 that it had agreed to sell a 25% stake in Darwin LNG and Bayu-Un- dan to South Korea’s SK E&S for $390mn.
Gallagher said: “We are continuing to advance discussions with other parties for
the sale of further equity in the Barossa project in line with our previously stated target ownership level of around 40% to achieve increased partner alignment and prudent future allocation of growth capi- tal. We are also in discussions with buyers for Barossa volumes.”
While Gallagher said Barossa was important project for Santos, he still expected to defer FID owing to “the uncertain economic impact of [coronavirus] COVID-19 combined with lower oil prices”.
Santos said its deal with JERA was subject to the finalisation of a binding sale and purchase agreement (SPA), the completion of its acqui- sition of the ConocoPhillips assets, third-party consents, regulatory approvals and an FID on Barossa.™
Image: ConocoPhillips
ExxonMobil pauses drilling offshore Victoria
PROJECTS & COMPANIES
US super-major ExxonMobil will suspend its drilLIng programme offshore Australia’s south- ern state of Victoria in response to the coronavi- rus (COVID-19) pandemic, the company said this week.
While ExxonMobil has completed two new wells in the West Barracouta development, which lies in the VIC/L1 block in the Bass Strait, the company said it needed to pause further drilling work while it implemented new meas- ures to deal with the virus.
VIC/L1 is part of the Gippsland Basin Joint Venture (GBJV), which is a 50:50 partner- ship between the US company and Australian mining giant BHP Billiton. West Barracouta is
considered to be one of the area’s largest remain- ing undeveloped gas fields, with ExxonMobil noting that the strait’s other undeveloped gas reservoirs would likely be more challenging and costly to develop.
ExxonMobil Australia chairman Nathan Fay said adjusting the company’s work practices had “presented significant challenges for the team, especially when you consider we needed to man- age strict workforce and process restrictions on the Noble Tom Prosser drilling rig.”
“While we continue to work on the West Bar- racouta development, due to COVID-19 related challenges, we will pause the other drilling work that was planned for the remainder of this year
P12
w w w . N E W S B A S E . c o m Week 15 16•April•2020