Woodside Petroleum has agreed to buy half of BHP Billiton’s stake in the Scarborough area gas fields, off the Western Australia coast, as it continues to expand its portfolio amid a prolonged slump in energy prices. Coleman is under pressure to strike deals to replenish Woodside’s stock of long-term gas projects after it indefinitely shelved plans to develop the $40 billion offshore Browse project in March due to low gas prices.
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ExxonMobil holds 50% of Scarborough and is the operator, while BHP holds 100% of Jupiter and Thebe. CEO Peter Coleman signaled at the Perth-based producer’s first half results that he’d chase more deals to diversify production with more $2 billion of funding in place.
“The JV is now working FLNG as its preferred development option and Woodside supports this work”, he said.
“If the Scarborough JV elects to look at other development options, including an onshore tieback via Woodside operated infrastructure, then Woodside would offer its support in understanding these opportunities”.
It follows an earlier acquisition of ConocoPhillips’ stake in three deep water oil blocks located off the cost of Senegal for US$350 million (£262.9 million) and recent gas discoveries made by Woodside in Myanmar.
“Woodside is a strong partner with substantial LNG experience in Western Australia, and we believe they will contribute positively to the future development of the Scarborough resources”.
Under the terms of the deal $US250 million will be paid to BHP upfront, and a further $US150 million contingent payment will be paid upon a final investment decision to develop the Scarborough field.
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The acquisition includes 25% interest in WA-1-R and 50% interest in WA-62-R, which together contain the Scarborough gas field. BHP will maintain a 50% stake in North Scarborough, Jupiter and Thebe fields and a 25% holding in Scarborough field. “The LNG industry in Australia has had a pretty poor record of collaboration but there might be a sign now that mindset is changing”.
