Phillips/Shell/Woodside to Increase Interests in Timor Sea.
Phillips, Woodside and Shell also announced that they have finalized principles for cooperative development of their Timor Sea gas resources. This cooperative effort includes the Bayu-Undan and Greater Sunrise fields.
The agreed principles, which cover supply of gas and marketing of liquefied natural gas (LNG), pipeline infrastructure and field optimization, will be developed further into cooperation agreements which will be ratified and executed by all relevant stakeholders by mid-year.
The agreed principles further envision production to commence from Bayu-Undan in 2004 to supply domestic customers in the Northern Territory and elsewhere, with Greater Sunrise production commencing as early as the second half of 2006. Gas required to satisfy Greater Sunrise deliveries prior to this time will be made available to the Greater Sunrise participants from Phillips-owned equity reserves in Bayu-Undan and possibly other participants in the Bayu-Undan project.
By the time the principles are executed, the Greater Sunrise participants plan to progress and execute agreements to supply natural gas to a diverse customer base including an LNG plant and a Methanex-owned methanol venture.
Phillips Petroleum Company Australia Pty Ltd president, Dr. Stephen Brand said: "This marks a historic day in the establishment of the Timor Sea as an important emerging gas development area. Sharing of offshore pipeline infrastructure and coordination of offshore and onshore operations will reduce the gas development costs of the Bayu-Undan and Greater Sunrise fields while meeting the short- and long-term requirements of a large customer base in the Northern Territory and the eastern and southern Australian states, as well as LNG customers. This agreement is good for all stakeholders, especially the emerging nation of East Timor. Cooperation is particularly important to foundation gas customers as it ensures supply security and reserves for the long term."
The participants in the Greater Sunrise development and their respective interests (subject to unitization) following this transaction are follows:
Woodside (Operator) 33.44%
Shell Development Australia 26.56%
Osaka Gas 10%
With the completion of the acquisition of Petroz, Phillips controls a 58.5% interest of the Bayu-Undan field and is the operator. Bayu-Undan contains an estimated 400 gross million barrels of condensate and 3.4 gross trillion cubic feet (tcf) of natural gas. The Sunrise field is operated by Woodside, and contains an estimated 321 million barrels of condensate and 9.16 tcf of natural gas. The Shell-operated Evans Shoal field contains an estimated 6.6 gross trillion cubic feet of dry gas without CO2.
Phillips Petroleum Company Australia Pty Ltd is a unit of Phillips Petroleum Company (NYSE:P), an integrated petroleum company with interests around the world. Founded in Bartlesville, Okla., in 1917, the company has 12,400 employees and $20.5 billion of assets, and had $21.2 billion of revenues in 2000.