Santos Ltd (ASX: STO) reported Tuesday that the Phase 3C infill drilling program has commenced offshore Timor-Leste in the Bayu-Undan field.
The program calls for drilling three production wells to develop additional natural gas and liquids reserves, Bayu-Undan Joint Venture operator Santos noted in a written statement emailed to Rigzone. The company pointed out the campaign, which secured a final investment decision this past January, will extend the life of Bayu-Undan as well production from the offshore facilities and the Darwin LNG plant in Australia.
“Only by way of a close and constructive working relationship with the Timor-Leste Government, through the Autoridade Nacional do Petroleo e Minerais (ANPM) and our joint venture partners have we been able to move so quickly towards our shared goal of safely maximizing value from the Bayu-Undan field,” remarked Kevin Gallagher, Santos’ managing director and CEO.
Gallagher noted the Noble Tom Prosser jack-up rig will drill the wells, adding that first production is expected in the third quarter of this year.
“The infill drilling program will add over 20 million barrels of oil equivalent gross reserves and production at a low cost of supply and importantly extends the life of Bayu-Undan and the jobs and investment that rely on it,” Gallagher continued. “With more than 400 Timorese currently working on Bayu-Undan activities, this will make an important economic contribution to Timor-Leste and keep our workforce both in Timor-Leste and Darwin in jobs for longer.”
ANPM President Florentino Soares Ferreira pointed out the Phase 3C campaign represents the first Bayu-Undan drilling program in Timor-Leste offshore waters since Timor-Leste and Australia ratified their Maritime Border Treaty. He said the investment follows a thorough assessment including an economic and technical review, procurement and local content strategy, and regulatory approval.
“The ANPM acknowledges commitment shared by Santos and its joint venture in relation to the Phase 3C infill well investment,” stated Ferreira. “It is another opportunity to maximize hydrocarbon production recovery and extension of production life, which will ultimately ensure economic benefit for all stakeholders and the state.”
Santos holds a 41.3% operated interest in Bayu-Undan. Its co-venturers include SK E&S (25%) (034730.KS), INPEX (11.4%) (TYO: 1605), Eni (11%) (NYSE: E), JERA (6.1%), and Tokyo Gas (3.1%) (OTCMKTS: TKGSY).
To contact the author, email mveazey@rigzone.com.
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