british gas wasting time..., page-25

Guess Conoco wouldn't step in IF BG steps out (big IF, IMO).


Conoco in $11bn asset sell-off in Qld and NT


Matt Chambers | October 09, 2009
Article from: The Australian

US OIL giant ConocoPhillips, which has liquefied natural gas export assets and prospects in Queensland, the Northern Territory and off the coast of Western Australia, plans to sell $US10 billion ($11bn) worth of assets and slash spending in the next two years in an effort to pay down a heavy debt burden.

The move marks a reversal in strategy for the Houston-based major, which has spent a lot on acquisitions in recent years, including the $7bn purchase of half of Origin Energy's Queensland coal-seam gas reserves and associated Gladstone LNG ambitions.

Conoco would not say if Australian assets would be put up for sale, but it remained committed to its Queensland LNG plans.

As well as the CSG assets, Conoco owns a 57 per cent stake in and is the operator of the Darwin LNG plant, one of only two operating LNG plants in the country (the other is the much bigger North West Shelf).

It also owns 51 per cent of, and operates, the prospective Poseidon prospect in offshore WA's Browse Basin, which could contain seven trillion cubic feet of gas. The market values it at more than $2bn, based on the share price of its partner, Karoon.

More information on the asset sales is expected when the company releases its third-quarter earnings on October 28.

A spokesman for Santos, which owns 11.4per cent of Darwin LNG, said he was unaware of any intention by Conoco to get out of the assets. Conoco said it would be selling exploration and production assets, as well as refining operations.

Confirming the Queensland assets were unlikely to be sold, New York oil and gas analysts said they thought the company would focus on selling mature production assets to position the remaining company to grow from a smaller asset base.

Darwin LNG is being considered as a base to develop the Sunrise gasfields of Woodside, Shell and Conoco in the Timor Sea.

It also has other expansion options there.

UBS analysts suspect half the 20 per cent stake of Russia's Lukoil that Conoco bought in 2004 will be on the auction block, with a potential value of $US5bn.

Conoco said it would cut capital spending to $US11bn next year, a 12 per cent reduction from this year and a 23 per cent drop from last year.

Conoco's recent heavy spending left it more exposed than competitors when oil and natural gas prices collapsed last year.

Unlike rivals Exxon and Chevron, which have multi-billion-dollar cash reserves, Conoco has less than $US1bn in cash and $US30.4bn in debt.

Chief executive Jim Mulva said Conoco was not abandoning its growth strategy but would focus on developing existing projects, rather than making purchases.

"We will replace reserves and grow production from a reduced, but more strategic, asset base," he said.

Additional reporting: The Wall Street Journal

http://www.theaustralian.news.com.au/business/story/0,28124,26184148-12829,00.html


Just waiting for JOCMEC to come in. You can only hope.