Portfolio growth

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Woodside took two major steps to broadening its growth portfolio in Q4 – in Australia and overseas, in gas and oil.

In September, Woodside agreed to acquire 50% of BHP Billiton’s Scarborough area assets in the Carnarvon Basin, creating a material increase in the company’s gas reserves.

In October, Woodside completed a transaction first announced in July — the purchase of the ConocoPhillips Senegal BV company. ConocoPhillips Senegal BV, now a wholly owned subsidiary of the Woodside group of companies, holds a 35% working interest in a production sharing contract (PSC) covering three exploration blocks offshore Senegal which contain the deep water oil discoveries SNE and FAN.  The other participants in the PSC are Cairn Energy (which owns 40% and is operator), FAR Ltd (15%) and the Senegal National Oil Company, Petrosen (10%).  Richard O’Loughlin, vice president corporate development, oversaw the acquisition. The team was led by commercial manager Richard Tasker and included representatives from most of Woodside’s functions and divisional groups.  The SNE discovery contains an estimated 560 MMbbl of recoverable oil (at 2C confidence level) with Woodside’s net working interest put at 196 MMbbl.  “These opportunities are rare and hard to come by,” Richard notes, adding that the asset was acquired at a very competitive price.

Jayne Baird, vice president exploration Africa and Atlantic margins, describes SNE as one of the largest global deep-water discoveries since 2014.  “SNE represents a near-term oil development opportunity that Woodside has an option to operate,” she says.  “A key factor differentiating Woodside from other potential buyers was its proven capabilities in deep water drilling, subsea and floating production, storage and offloading (FPSO) vessel operations.  “This agreement materially increases our position in the highly prospective region and we look forward to working with the Government of Senegal and the joint venture (JV) participants to progress the commercial development of SNE and any future discoveries.” Not only is it a world-class asset but it builds on the agreement Woodside made in February to purchase a 65% interest in the AGC Profond exploration block to its south, in the Senegal-Guinea Bissau joint development zone.  AGC Profond is a significant resource potential in a highly prospective region. 

In November, Jayne and Richard were part of a Woodside delegation, led by executive vice president global exploration Phil Loader, to Dakar, Senegal, for the inaugural Mauritania-Senegal-Guinea-Bissau-Conakry (MSGBC) Basin Summit and Exhibition.

In Australia, the acquisition of 50% of BHP Billiton’s Scarborough area assets in the Scarborough field is consistent with Woodside’s strategy and will complement our existing resources in the Carnarvon Basin.  The assets acquired include the Scarborough, Jupiter and Thebe gas fields, estimated to contain gross 8.7 trillion cubic feet of gas. Woodside’s share is estimated to be 462 MMboe.  The assets constitute part of a JV which includes ExxonMobil (Operator), as well as BHP Billiton and now Woodside.

Woodside is a long-time participant in the Carnarvon Basin with NWS and Pluto (both of which the company operates) and Wheatstone.  Richard also oversaw the Scarborough acquisition by a multi-discipline team led by executive adviser Mark Abbotsford.  “The Scarborough assets are world class and fit very well with our broader strategy,” says Mark.  “However, our job is far from done. We now need to work with the JV to commercialise the resources in the best way.”  And with a maturing upstream position in the NWS, the addition of the Scarborough resources is a welcome addition to Woodside’s resources.

Announcing the completion of the acquisition, chief executive officer Peter Coleman noted the JV had floating LNG (FLNG) as its preferred development option, and said Woodside supported this work.  “If the Scarborough JV elects to look at other development options, including an onshore tieback via Woodside-operated infrastructure, then Woodside would offer its support in understanding these opportunities,” the CEO said. 

Scarborough’s asset manager is Kimberly Walpot.  “It’s been nearly four decades since Scarborough was discovered, and over this period it has attracted the attention of all the major players in the Carnarvon Basin,” Kimberly points out.  “With the addition of Woodside to the Scarborough JV, the momentum is building to unlock these resources.”  She says the next step in 2017 will be to create alignment both within the Scarborough JV and with potential downstream liquefaction providers as we advance toward a concept select decision. ​

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Trunkline Q4 2016