Bayu Undan investment swells

Bayu Undan investment swells

MELBOURNE (Dow Jones): Petroz NL, an Australian oil and gas
concern, said Monday that the forecast capital cost of the Bayu
Undan natural gas project has risen to US$1.57 billion from $1.5
billion.

Petroz said its share of the cost has increased to $129.4
million from $123.3 million.

Chief reasons for the cost boost include increased drilling
rig rates, a reevaluation of design engineering needs, and
anticipated platform design changes, Petroz said in a statement.

Petroz, currently the subject of a takeover tussle, holds an
8.25 percent stake in Bayu Undan, which is located in the Timor
Sea.

Phillips, which controls 50.3 percent of the project, has
offered 70 cents a share for Petroz, trumping a 56-cents-a-share
bid from another Bayu Undan partner, Italy's ENI SpA.

Other partners in Bayu Undan are Australia's Santos Ltd. with
11.8 percent, Japan's Inpex with 11.7 percent, and Kerr-McGee
Corp. of the U.S.