Woodside, Phillips, Shell detail Timor sea gas deal

Woodside, Phillips, Shell detail Timor sea gas deal

MELBOURNE (Dow Jones): Takeover target Woodside Petroleum Ltd.
Friday finalized the details of its deal with Phillips Petroleum
Co. to jointly develop their Timor Sea gas fields.

Phillips will pay Woodside effectively upwards of US$176
million to acquire a 16.39 percent stake from the Australian
company in Greater Sunrise fields, raising its stake to 30
percent, while granting Woodside a conditional option to buy up
to 5 percent of Phillips' nearby Bayu-Undan fields.

The price isn't expected to changed the dynamics of Woodside's
fight to beat off a A$9.87 billion takeover bid from Royal Dutch
Shell Group, since it is in line with valuations from both
Woodside and Shell.

While Woodside continues to argue that Shell's bid is too
cheap, the focus of the fight remains with the Australian
government, which is taking its time over whether to approve the
bid amid concerns that it is against the national interest.

By jointly developing Bayu-Undan and Greater Sunrise, the
participants hope to develop the field fast and more cheaply.
While the Sunrise and Bayu-Undan projects will compete for
customers in Australia's domestic gas market, Phillips will take
the lead on marketing eventual liquefied natural gas from the two
projects.

Under the deal, that was first announced in November, Phillips
has agreed to fund US$176 million worth of Woodside's costs for
any development at Sunrise, escalated at 10 percent a year.

Shell, a fellow participant in Sunrise, has given the deal its
blessing, but it remains subject to 10% field participant Osaka
Gas Co. (J.OSG) not exercising its preemptive right.