Woodside Petroleum Ltd., Perth, signed an agreement with BHP Billiton Ltd. in which BHPB has waived its right of preemption and provides its consent to the sale to Woodside by ExxonMobil Corp. of ExxonMobil’s 50% interest in retention lease WA-1-R and the Scarborough Joint Venture Operating Agreement.
The deal now means that Woodside would hold 75% interest in Scarborough field, which lies on the Exmouth Plateau in 1,000 m of water off Western Australia.
Additionally, Woodside will become operator of the field and its proposed development once the ExxonMobil sale is completed.
Woodside’s agreement with BHPB also grants BHPB an option to purchase another 10% interest in Scarborough on the same terms as the ExxonMobil-Woodside transaction. This option may be exercised by BHPB at any time prior to the end of December 2019 or the approval to begin the front-end engineering and design phase of Scarborough development project—whichever is the earlier.
A final part of the agreement stipulates that Woodside and BHPB will undertake good faith discussions in relation to several matters. These include the utilisation of WA-1-R, which contains the majority of Scarborough field and the adjacent WA-62-R where Woodside and BHPB each hold 50% interest; potential offers to sell up to 10% of Scarborough to foundation LNG buyers on a pro-rata basis; and technical and commercial arrangements for the field development.
Woodside Chief Executive Officer Peter Coleman said the agreement strengthens alignment and certainty for the development of Scarborough field and the combine can now focus on finalizing a development concept so that it can move to front-end engineering and design work and aim at a final investment decision in 2020. The plan is to transport gas via pipeline to the Woodside-operated Pluto LNG plant on the Burrup Peninsula and produce up to 6 million tonnes/year of LNG.
The ExxonMobil-Woodside transaction is on track for completion by the end of this month.