
AUSTRALIA — Carnarvon Energy Limited has provided an update on the Dorado Phase 1 liquids development project off the coast of Western Australia, highlighting significant progress in optimising production rates and reducing capital expenditure.
The joint venture, comprising Santos Limited (80 per cent operator), Carnarvon (10 per cent), and OPIC Australia Pty Ltd (10 per cent), is exploring several measures to improve the project’s economics.
These include:
- Optimising production rates to reduce the size of key facilities
- Phasing the timing of well initialisations
- Assessing FPSO vessel redeployment options
These initiatives are expected to considerably reduce the overall capital expenditure for the Phase 1 liquids development and potentially shorten the time to first oil.
Carnarvon CEO Philip Huizenga expressed optimism about the project’s progress, stating: “I am pleased with the progress the Dorado project has made and am excited by the re-shaping of the project, which is expected to reduce the total capital outlay by Carnarvon.”
The joint venture plans to resume the front-end engineering design (FEED) process later this year, with a final investment decision (FID) expected in 2025.
This timeline allows for a thorough evaluation of potential cost-saving opportunities and the securing of necessary environmental approvals.
Carnarvon estimates that the overall capital expenditure prior to the first oil will be below the previous guidance of approximately US$2 billion.
The company expects to be fully funded for its share of development costs, citing its strong cash position of $176 million (approximately US$115 million) as of March 31, 2024, a US$90 million development funding cost carry, and the potential for additional debt financing.
The Dorado project, considered one of Australia’s largest oil discoveries in recent decades, is viewed as a critical development for improving the country’s liquid fuel security.
With proposed annual gross production between 27 million and 36 million barrels, it has the potential to surpass current national production levels.
As the joint venture continues to refine the project design and economics, stakeholders await further updates on this significant offshore development that could play a crucial role in Australia’s energy landscape.