Australia okays new Timor oil project

Australia okays new Timor oil project

SYDNEY (AFP): The Australian government gave the go-ahead
yesterday for a one billion Australian dollar (US$760 million)
oil development project in the Timor Sea.

The government granted a license to Woodside Petroleum Ltd. to
develop along with two joint venture partners two areas of oil
fields known as Laminaria and Corallina with total development
costs of around A$1.08 billion.

Woodside will hold a 50 percent stake and its partners, BHP
Petroleum and Shell Development (Australia Pty. Ltd.) will each
hold a 25 percent share in the venture.

Production on what is claimed will be the world's biggest
offshore production site is expected to begin in early 1999.

The adjacent fields, which hold reserves estimated at up to
250 million barrels, lie about 550 kilometers (343 miles)
northwest of Darwin, in an area administered by the Northern
Territory government on behalf of Canberra.

Announcing the move, Resources Minister Warwick Parer told
reporters: "One of the great benefits of this production license
is it will encourage more exploration and development in
Australia.

"Compared with most other provinces around the world,
Australia is grossly unexplored in regard to oil and this sort of
thing will give a great impetus to that exploration."

"It will improve our balance of payments by about A$1.8
billion a year, which is equivalent to one month's current
account deficit, so this is good news from the point of view of
foreign debt," Parer said.

"From Australia's point of view it's a major project."
Australia, currently 75 percent self-sufficient in oil, will have
its self-sufficiency boosted by up to 20 percent when production
starts, Parer said.

Woodside managing director John Akehurst said that with water
depths of 360-to-420 meters (1200 to 1360 feet), the facility at
Laminaria would be Australia's deepest offshore production site
and the world's largest.

He said Woodside was committed to the Timor Sea program and
had an active exploration program underway to follow up on the
Laminaria and Corallina projects.

"We are committing to additional capital investment ... to
create the infrastructure for early production from future
discoveries which are hoped for in the area," he said in a
statement.