Oz Santos Announces Bayu-Undan FID

Australia's Santos on January 5 announced a final investment decision for the $235mn phase 3C infill drilling programme at the Bayu-Undan field in the Timor Sea, offshore Timor-Leste.

“The programme comprises three production wells (two platform and one subsea) and will develop additional natural gas and liquids reserves, extending field life as well as production from the offshore facilities and the Darwin LNG plant,” Santos said.

Sanction of the project comes less than seven months after Santos became the operator of the Bayu-Undan joint venture following completion of the acquisition of ConocoPhillips' northern Australia and Timor-Leste assets.

The wells will be drilled using the Noble Tom Prosser jack-up rig, with the first well scheduled to spud in second quarter of this year, and production from the first well expected in the third.

Santos CEO Kevin Gallagher said that the infill drilling programme will add over 20mn barrels of oil equivalent gross reserves and production “at a low cost of supply and extends the life of Bayu-Undan, reducing the period that Darwin LNG is offline before the Barossa project comes on stream."

Santos has a 68.4% interest and operatorship in Bayu-Undan and Darwin LNG which will reduce to 43.4% upon completion of a 25% sell down to South Korea's SK E&S.

"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," Gallagher said.