Carnarvon Energy Limited has reported a setback in the development of the Dorado Phase 1 liquids project, located offshore Western Australia.

The Joint Venture (JV) operator, Santos Limited, has decided against purchasing the previously identified Floating Production Storage and Offloading (FPSO) vessel for the project.

Additionally, the operator has opted to postpone entry into Front End Engineering and Design (FEED) at this time.

As a result, the previously targeted Final Investment Decision (FID) for 2025 will be deferred.

The Dorado JV, comprising Santos Limited (80 per cent and operator), Carnarvon Energy Limited (10 per cent), and OPIC Australia Pty Ltd (10% per cent, a subsidiary of CPC Corporation), is currently reassessing the project timeline.

Despite this setback, the JV partners maintain strong confidence in the Dorado project and the broader Bedout Basin assets.

They remain committed to maximising value from these assets and plan to drill further exploration wells in 2026, in line with tenure commitments.

Carnarvon Energy maintains a robust financial position, with over $180 million in cash reserves, a US$90 million development cost carry, and a low-cost corporate structure.

Philip Huizenga, Carnarvon’s Chief Executive Officer, expressed disappointment regarding the project’s delay but reaffirmed the company’s support for the JV’s value realisation efforts.

He stated: “Carnarvon is fully supportive of the Joint Venture’s desires to realise value for the asset and will support any initiatives for drilling as soon as possible.”

This development marks a significant shift from earlier plans. In July 2024, Carnarvon reported positive progress towards FEED re-entry, with expectations of FID in 2025.

The company will provide further updates to the market as the JV reviews the project timeline.