Aug.
2001 Vol. 222 No. 8 International Outlook
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SOUTH PACIFIC
JPDA (ZOCA)
It took nearly a year, but Australia and the new
government in East Timor have hammered out a deal concerning the area formerly known as ZOCA, now called the
Joint Petroleum Development Area (JPDA). The 30-year agreement allows East Timor to receive 90% of oil and gas
revenues from E&P operations in the Timor Sea, with Australia getting the remaining 10%. Current
territorial boundaries, as well as existing contractual terms regarding three major projects, will be kept as
is.
The Bayu-Undan project now estimated at $1.57
billion is still expected online by year-end 2003. The fields reserves are 3.4 Tcf of gas and 400
million bbl of condensate and gas liquids. The complex project involves wet gas production; liquids stripping;
separation and storage of condensate, butane and propane; and re-injection of dry gas.
A key development hurdle was overcome, when Phillips
signed a Letter of Intent with El Paso Corp. to supply 4.8 million t of LNG to the U.S. West Coast. (One small
snag: The U.S. does not have an LNG re-gasification terminal on the West Coast.)
The Sunrise gas project, comprising Greater Sunrise and
Evans Shoal fields in Northern Territory (NT) waters, contains proved reserves of 16.9 Tcfg and 337 million
bbl of condensate. The project is operated by the 50/50 Shell / Woodside partnership, NAGV. Phillips
(Bayu-Undan) and Shell / Woodside (Sunrise) signed a cooperation agreement that will help reduce development
costs on their projects the two largest within JPDA and NT.
However, gas-supply contracts at Sunrise cannot be met
until 2007, some two years too late; but Bayu-Undan will fill the supply gap. This cooperation, together with
last years agreement to supply 110 petajoules (about 100 Bcf) per year to Methanex Corp. on Australias
northern coast, plus the above El Paso supply contract, should allow monitization efforts of the remote areas
enormous gas reserves to succeed.
An interesting development occurred when the
Shell-Woodside consortium sold a 10% interest in the Greater Sunrise and Evans Shoal fields to Japans
Osaka Gas. No other details were released.
Woodside and partners have agreed to spend $130 million
for Phase II development of Laminaria and Coralina oil fields. Two horizontal infill wells will be drilled
starting in late 2001. They should add 65,000 bopd to production, which is via the FPSO
Northern Endeavor.
Remedial work on Elang and Kakatua wells last December
boosted oil production 8,500 bpd, to 22,000 bpd. Proved reserves increased 36.9% to 21.5 million bbl. The
wells, together with Kakatua North, are the areas first production, resulting in payment of $5.7 million
to the new East Timor government its first revenue derived from the zone.
U.S. independent Oceanic Explorer says it has
exploration rights to nearly all of Area A within the former ZOCA, and will take its claim to the Australian
courts. The company says that such rights were granted to its PetroTimor subsidiary in 1974 by the Portuguese,
Timors former colonial owner.
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