Petroz says deal expected on Timor 'liquids' project in '99
Petroz says deal expected on Timor 'liquids' project in '99
BRISBANE, Australia (Bloomberg): Petroz NL said the partners
in the Bayu-Undan gas field in the Timor Sea probably will decide
by the end of March to go ahead with a US$1.4 billion "liquids"
extraction project.
The Brisbane-based oil and gas company said the detailed
engineering plan is now in the hands of the joint venture
partners and the only major hold-up is a resolution of
Indonesia's tax policy.
"We would expect to finalize the engineering aspects by the
end of December," Petroz Managing Director Rod Brown told
shareholders at the company's annual meeting.
Bayu-Undan, in the Timor Sea Zone of Cooperation between
Australia and Indonesia, contains natural gas and condensate, or
light oil, equivalent to about 1 billion barrels of crude oil.
The partners, including BHP Petroleum and Phillips Petroleum Co.
expect to begin producing liquids such as light oil and liquid
petroleum gas from the field in 2002.
Petroz, which has a 8.25 percent stake in Bayu-Undan, likely
will have to sell shares or "quasi-equity" in the second half of
1999 to raise part of its A$200 million (US$126 million) portion
of the cost, if the liquids project goes ahead, said Chairman
Greg Swindon.
BHP Petroleum, a unit of Broken Hill Proprietary Co.,
Australia's largest resources company, owns 23.4 percent of Bayu-
Undan, Bartlesville, Oklahoma-based Phillips has 26.9 percent,
and Adelaide-based Santos Ltd., 11.8 percent.
Tax Settlement
BHP and Phillips have been meeting with the Indonesian
authorities to try to reach a quick settlement of tax and royalty
levels for the field. The Zone of Cooperation is jointly
administered by Australia and Indonesia.
The partners have disagreed about how to proceed with a plan
to liquefy the natural gas from the field to ship it to markets
in north Asia. The project also has been slowed down by the
recession in those markets.
Petroz said in September its profit for the year ended June 30
fell 57 percent to A$2.4 million, as production declined at its
mature Surat Basin fields in Queensland state, before oil began
to flow from the Elang-Kakatua oil fields in the Timor Sea.
Petroz shares were unchanged at 74 Australian cents. They've
fallen 20 percent over the past year.