Green light on US$235M drilling programme boosts Darwin LNG

Santos managing director and chief executive Kevin Gallagher said the project “will optimise field recovery, extend production and deliver significant value to both the Bayu-Undan Joint Venture and the people of Timor-Leste.”

Continued Mr Gallagher, “This infill drilling programme adds over 20M 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 Darwin LNG is offline before the Barossa project comes on stream.”

The US$3.6Bn Barossa Project will provide additional gas resources to Darwin LNG. An FID on Barossa is expected in 2021. Japanese trading house Mitsubishi has already signed a 10-year contract to source LNG from Barossa.

Santos said the drilling programme at Bayu-Undan 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 LNG plant.

The project sanctioning comes less than seven months after Santos became operator of the Bayu-Undan Joint Venture after acquiring ConocoPhillips’ northern Australia and Timor-Leste assets.

The wells will be drilled using jack-up rig Noble Tom Prosser, with the first well scheduled to spud in Q2 2021, and production from the first well expected in Q3 2021.

Santos currently has a 68.4% interest and operatorship in Bayu-Undan and Darwin LNG which will reduce to 43.4% upon completion of a 25% sell down to SK E&S, which is awaiting Australian regulatory approvals. Mr Gallagher said the sell-down will complete once the FID on Barossa is taken in H1 2021.