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.