Project Profile
Value: US$7 billion
Location: Bonaparte basin, Timor Sea, Australia
Water depth: 200 - 320 m
Final Investment Decision: end of 2018 or early 2019
Caldita and Barossa/Lynedoch are two gas discoveries in Australia’s offshore Bonaparte basin, in the Timor Sea. Santos and ConocoPhillips were initially the owners of the discoveries which are located in the NT/P61 and NT/P69 blocks (Caldita and Barossa/Lynedoch respectively), where ConocoPhillips is the operator.
In the ConocoPhillips-operated Caldita and Barossa fields, drilling of the Caldita-2 well in NT/P61 – located 6 km from the Caldita-1 discovery well, which was drilled in 2005 – commenced in early December 2006 and was completed in February 2007. Caldita-2 was drilled to a total depth of 3,973 m and confirmed the presence of gas in the western part of the Caldita structure. The well was plugged and abandoned as planned. Testing of the Barossa-1 well in late 2006 confirmed the presence of gas and provided valuable reservoir and composition data. The well was drilled to a total depth of 4,310 m, with two drill stem tests completed. The first test, of a lower-quality reservoir interval, flowed gas at a rate of approximately 0.8 MMcfd and the second test, of a higher-quality reservoir interval, flowed at a rate of approximately 30.1 MMcfd. Barossa-1 was also plugged and abandoned as planned.
Santos entered, in June 2012, into an agreement with ConocoPhillips and SK E&S, an affiliate of conglomerate SK Group, to progress the development of the Caldita and Barossa gas discoveries located in the Timor Sea. Prior to the agreement, Santos held a 40% interest in both discoveries, with operator ConocoPhillips holding the remaining 60%. In addition, Korean conglomerate SK Group will farm-in to the gas discoveries as well. SK Group will earn a non-operated 37.5% stake in the NT/P61 and NT/P69 exploration permits through a proportionate reduction by ConocoPhillips and Australia’s Santos. This means ConocoPhillips, which currently holds 60% of the permits, would hold 37.5% and Santos’ 40% stake would be reduced to 25%. In exchange for this, SK will fund the first US$260 million of a three-well appraisal programme over the blocks, expected to start in 2013.
When that is completed, SK will have the option to increase its interest to 49.5% in exchange for a payment of US$60 million to ConocoPhillips and Santos, taking ConocoPhillips’ share to 30.3% and Santos’ to 20.2%. The Korean conglomerate will also fund up to US$90 million of pre-Front End Engineering and FEED activities and make final investment decision and first liquefied natural gas cargo payments of up to US$110 million once certain milestones are met.
Operators:
ConocoPhillips: Operator with 37.5% interest
SK Group: 37.5% interest
Santos: 25% interest