The project will involve drilling of three production wells at the offshore Timor-Leste field
Santos has taken a final investment decision (FID) for the $235m phase 3C infill drilling programme at the Bayu-Undan gas and condensate field in Timor Sea, offshore Timor-Leste.
The Australian oil and gas company is the operator of the Bayu-Undan joint venture.
Under the phase 3C infill drilling campaign, the joint venture will drill three production wells, of which two are platform wells and one is a subsea well.
The project’s goal is to develop additional natural gas and liquids reserves, which will help in extending field life and also production from the offshore facilities and the Darwin LNG plant in the Northern Territory of Australia.
According to Santos managing director and CEO Kevin Gallagher, the project adds more than 20 million barrels of oil equivalent gross reserves while reducing the period that the Darwin LNG plant is offline prior to the production start-up at the Barossa gas project.
Santos will deploy the Noble Tom Prosser jack-up rig for drilling the wells. The first of the three productions wells is slated to be spudded in the second quarter of 2021.
The company is targeting to begin production from the first well in the third quarter of 2021.
Gallagher said: “We are delighted to be able to pursue an opportunity that wasn’t on the table 12 months ago, which will optimise field recovery, extend production and deliver significant value to both the Bayu-Undan Joint Venture and the people of Timor-Leste.”
Santos became the operator of the Bayu-Undan joint venture in May 2020 after closing the $1.26bn acquisition of ConocoPhillips’ assets in northern Australia and Timor-Leste.
Following the deal, Santos increased its stake to 68.4% in the Bayu-Undan gas and condensate field and the Darwin LNG facility.
Before the closing of the deal, in March 2020, Santos entered into an agreement with South Korea-based SK E&S to sell a stake of 25% in the offshore field and the LNG facility for $390m.
After the completion of the transaction with SK E&S, Santos will have a stake of 43.4% in the assets.
Gallagher said: “Completion of the SK E&S sell-down is now well advanced with consent from Bayu-Undan/DLNG Joint Venture and Timor-Leste regulator received before Christmas last year and we are well progressed with Australian regulatory approvals. The sell-down will complete once the Final Investment Decision on Barossa is taken in 1H 2021.”