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.