Petroz says deal expected on Timor 'liquids' project in '99<\/p>\n
BRISBANE, Australia (Bloomberg): Petroz NL said the partners
\nin the Bayu-Undan gas field in the Timor Sea probably will decide
\nby the end of March to go ahead with a US$1.4 billion \"liquids\"
\nextraction project.<\/p>\n
The Brisbane-based oil and gas company said the detailed
\nengineering plan is now in the hands of the joint venture
\npartners and the only major hold-up is a resolution of
\nIndonesia's tax policy.<\/p>\n
\"We would expect to finalize the engineering aspects by the
\nend of December,\" Petroz Managing Director Rod Brown told
\nshareholders at the company's annual meeting.<\/p>\n
Bayu-Undan, in the Timor Sea Zone of Cooperation between
\nAustralia and Indonesia, contains natural gas and condensate, or
\nlight oil, equivalent to about 1 billion barrels of crude oil.
\nThe partners, including BHP Petroleum and Phillips Petroleum Co.
\nexpect to begin producing liquids such as light oil and liquid
\npetroleum gas from the field in 2002.<\/p>\n
Petroz, which has a 8.25 percent stake in Bayu-Undan, likely
\nwill have to sell shares or \"quasi-equity\" in the second half of
\n1999 to raise part of its A$200 million (US$126 million) portion
\nof the cost, if the liquids project goes ahead, said Chairman
\nGreg Swindon.<\/p>\n
BHP Petroleum, a unit of Broken Hill Proprietary Co.,
\nAustralia's largest resources company, owns 23.4 percent of Bayu-
\nUndan, Bartlesville, Oklahoma-based Phillips has 26.9 percent,
\nand Adelaide-based Santos Ltd., 11.8 percent.<\/p>\n
Tax Settlement<\/p>\n
BHP and Phillips have been meeting with the Indonesian
\nauthorities to try to reach a quick settlement of tax and royalty
\nlevels for the field. The Zone of Cooperation is jointly
\nadministered by Australia and Indonesia.<\/p>\n
The partners have disagreed about how to proceed with a plan
\nto liquefy the natural gas from the field to ship it to markets
\nin north Asia. The project also has been slowed down by the
\nrecession in those markets.<\/p>\n
Petroz said in September its profit for the year ended June 30
\nfell 57 percent to A$2.4 million, as production declined at its
\nmature Surat Basin fields in Queensland state, before oil began
\nto flow from the Elang-Kakatua oil fields in the Timor Sea.<\/p>\n
Petroz shares were unchanged at 74 Australian cents. They've
\nfallen 20 percent over the past year.<\/p>",
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