Santos sells down Bonaparte gas fields; prepares for FLNG

Aug. 18, 2009
Santos has sold 60% of its interests in the Petrel, Tern, and Frigate gas fields in the Bonaparte Gulf straddling the Western Australian and Northern Territory offshore border to GDF Suez for $200 million.

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Aug. 18 -- Santos has sold 60% of its interests in the Petrel, Tern, and Frigate gas fields in the Bonaparte Gulf straddling the Western Australian and Northern Territory offshore border to GDF Suez for $200 million.

Santos previously held 100% interest in the fields. GDF Suez will gain operatorship in 2011.

The two companies also have formed a joint venture called Bonaparte LNG to develop the fields via a floating LNG facility capable of producing 2 million tonnes/year of LNG as well as market the gas. GDF Suez will lift all the LNG production and ship it to the Asia-Pacific region.

GDF Suez will carry Santos’s share of pre-FEED and FEED costs and make an additional payment to Santos of $170 million once a final investment decision is reached.

The deal is conditional on Australian Foreign Investment Review Board approval.

Contingent reserves in the fields total 220 million boe, although much of this is dry gas with estimated reserves of 1.5 tcf.

The fields were discovered by ARCO about 30-40 years ago—Petrel with a spectacular blow-out and rig fire in 1969, Tern in 1971, and Frigate in 1978. Santos drilled Frigate Deep-1 to confirm that discovery in 2008.

They lie 250-300 km west of Darwin.

Numerous plans for their development over the years, usually via a pipeline to shore, have never eventuated partly because of the low liquids content and hence lack of an additional revenue stream.

This deal represents GDF Suez’s first entry into Australia’s petroleum exploration and production business.

Santos is now looking at commercialization options for its other gas field interests, which include Evans Shoal, Barossa, and Caldita and lie further east in the Arafura Sea, just north of Darwin.