Woodside, Phillips join forces on Timor Sea ventures

Australia's Woodside Energy Ltd. and US oil company Phillips Petroleum Co. have put their names to an 'in-principle' deal that will see the two majors cooperate in moving ahead their respective Timor Sea gas resources, the Greater Sunrise and Bayu-Undan developments. For Woodside and Phillips, the agreement also clears the way for plans for a major new domestic liquefied natural gas export project based in Darwin.


Australia's Woodside Energy Ltd. and US oil company Phillips Petroleum Co. have put their names to an "in principle" deal that will see the two majors cooperate in moving ahead their respective Timor Sea gas resources, the Greater Sunrise and Bayu-Undan developments.

For Woodside and Phillips, the agreement also clears the way for plans for a major new domestic liquefied natural gas (LNG) export project based in Darwin.

Under the deal, the two companies said that they would share offshore and onshore facilities to cut the development costs at both Bayu-Undan, where first liquids production is expected in late 2003, and Sunrise, where gas production should start in 2005.

In a joint statement, the two companies' chiefs, Woodside Managing Director John Akehurst and Phillips' CEO Jim Mulva, said the deal would mean the "prospect of a significantly larger Timor Sea gas development is considerably enhanced with resultant higher and earlier production of resources."

They said the cooperative concept was designed to combine the "early gas delivery potential of Bayu-Undan with the large reserve base of the Greater Sunrise fields."

"The intention," they said, "[was to] pursue a shared vision of regional gas developments" that would "be the basis for higher value outcomes for [the two companies'] joint venture partners than could be realized with stand-alone developments."

The Bayu-Undan development, located in 80 m of water in the so-called Zone of Cooperation between East Timor and Australia, is thought to contain some 400 million bbl of condensate and gas liquids and 3 tcf of natural gas.

Greater Sunrise, located in Australia's Bonaparte basin, is made up of the Sunrise, Sunset, and Troubadour fields. Woodside postulates the field holds 9.2 tcf of gas. Bringing this development to first gas is projected to call for an investment of $2.5 billion (Aus.) in offshore facilities and pipelines.

The agreement is understood to have been welcomed by the United Nations Transitional Administration in East Timor because it could "maximize" the economic returns of Timor Sea gas development to the emerging nation of East Timor.

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