re: what the hell happened, more details
The comments by Voelte, who returned to Australia Tuesday after a two-week
investment roadshow in the U.S., are seen as a conscious effort to cool
expectations about the major exploration effort.
Speculation about the program caused a share price surge earlier this year in
Hardman Resources Ltd. (HDR.AU), Woodside's Perth-based joint venture partner.
Hardman said recently that six new exploration prospects in Mauritania have the
potential to hold about 1.3 billion barrels of oil.
Voelte declined to comment on that estimate, adding that exploration is "still a
high risk business."
"The overall risks have gone down in Mauritania because we have a proven
hydrocarbon system," he said.
"But we'll be drilling some new concepts and we won't be successful in everything
that we drill."
"Nevertheless we do believe Mauritania is a very good oil and gas province that
will be quite large in the Woodside portfolio."
Earlier this year Woodside approved the US$600 million Chinguetti development,
due to come on stream in early 2006. It also plans four appraisal wells in the
current program for the Tiof discovery.
"If we're successful we'll continue our development of the early production
system, where Tiof oil production commences as early as 2006, probably midyear,"
he said.
Woodside has stakes of between 48% and 53.8% in various Mauritania fields that
have been hailed as a new oil province by analysts due to recent discoveries of
more than 100 million barrels. Hardman has investments in fields between 21.6%
and 28.8%.
Voelte's comments put instant pressure on shares in the Australian-based
partners, with Woodside down 17 cents or 0.9% to A$17.93, off a low of A$17.75.
Hardman had eased four cents to A$1.89 at about 0430 GMT, off a low of A$1.84
after the interview was issued.
Turning to Woodside's Australian projects, Voelte said that the company is close
to producing the first liquefied natural gas from its recently completed Train 4
expansion of the North West Shelf project.
"Cooldown has begun on the plant and we're well on the way to producing the first
LNG ahead of the commissioning schedule," he said.
Woodside is operator and one-sixth owner of the Shelf. The other equal partners
are BHP, Royal Dutch/Shell (RD), Chevron Texaco Corp. (CVX), BP PLC (BP) and
Japan Australia LNG, itself an equal joint venture between Japan's Mitsubishi
Corp. (8058.TO) and Mitsui & Co. (8031.TO).
Australia's biggest resources project, the Shelf has shipped more than 1,600 LNG
cargoes over 15 years, mainly to a core group of Japanese power utilities.
But a A$25 billion Chinese export deal signed in August 2002, along with the
prospect of new Korean and U.S. sales, has prompted a major expansion of the
Shelf's facilities.
The recently completed A$2.7 billion Train Four expansion lifted the venture's
annual capacity to 11.7 million tons.
A proposed A$2 billion Fifth Train expansion due to be approved in the first half
of next year would lift annual output to around 16 million tons.
Turning to the company's undeveloped Sunrise gas project in the Timor Sea, Voelte
reiterated that Woodside needs certainty over fiscal, jurisdiction and legal
arrangements to move forward.
"We believe that if the IUA (International Unitization Agreement) is not signed
by the end of the year, the project will stall," he said, in a reference to a
temporary revenue sharing agreement between Australia and East Timor that is yet
to be ratified by the latter country.
The latest border talks, which will affect the splitting of billions of dollars
of oil and gas revenues between Australia and East Timor, are due later this
month.
Woodside has said that it needs fiscal and legal certainty on Sunrise by the end
of the year to decide on a development option and capture a 2010 marketing
"window" for LNG exports.
"The next logical step for Sunrise is front end engineering and design - they
tell me it is a A$60 million contract," Voelte said.
Regarded as the richest undeveloped gas prize in the Timor Sea, Sunrise is
operated by Woodside.
Other joint venture partners are U.S.-based Conoco Phillips (COP), Royal
Dutch/Shell Group (RD) and Japan's Osaka Gas Co Lt. (9532.TO).
-By Stephen Bell, Dow Jones Newswires; 61-8-9245-6408
[email protected]
(END) Dow Jones Newswires
Wednesday 08 September 2004 1
HDR
hardman resources limited
