Santos has announced a Final Investment Decision for the US$235 million Phase 3C infill drilling program at the Bayu-Undan field in the Timor Sea, offshore of Timor-Leste.
The program comprises three production wells (two platform and one subsea) and will develop additional natural gas and liquids reserves, extending field life as well as production from the offshore facilities and the Darwin liquified natural gas (LNG) plant.
Sanction of the project comes less than seven months after Santos became operator of the Bayu-Undan Joint Venture following completion of the acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets.
The wells will be drilled using the Noble Tom Prosser jack-up rig, with the first well scheduled to spud in the second quarter of 2021, and production from the first well forecast to occur in the third quarter 2021.
Santos Managing Director and Chief Executive Officer, Kevin Gallagher, said the company is delighted to be able to pursue an opportunity that wasn’t on the table 12 months ago, which will optimise field recovery, extend production and deliver significant value to both the Bayu-Undan Joint Venture and the people of Timor-Leste.
“Only through a close and constructive working relationship with the Timor-Leste Government and our joint venture partners have we been able to move so quickly towards our shared goal of maximising value from the Bayu-Undan field,” Mr Gallagher said.
“This infill drilling program adds over 20 million barrels of oil equivalent gross reserves and production at a low of cost of supply and extends the life of Bayu-Undan, reducing the period that Darwin LNG is offline before the Barossa project comes on stream.”
Santos currently has a 68.4 per cent interest and operatorship in Bayu-Undan and Darwin LNG which will reduce to 43.4 per cent upon completion of a 25 per cent sell down to SK E&S.
Mr Gallagher detailed that the completion of the SK E&S sell-down is now well advanced with consent from Bayu-Undan/DLNG Joint Venture and Timor-Leste regulator received before Christmas last year and they are well progressed with Australian regulatory approvals.
“The sell-down will complete once the Final Investment Decision on Barossa is taken in 1H 2021,” he added.
