wpl-apache talks fail !!

Couple of articles on WPL-Apache talks failure or CVX-Apache deal whichever way u see it.

Chevron Media release
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Here's the link to an article from 'The West'

Woodside loser as Apache picks Chevron

Woodside Petroleum has suffered a big blow in its attempt to secure third-party gas to underpin development of its flagship Pluto LNG project after Apache Corp last night decided to instead support arch rival Chevron.

Apache's decision to develop its Julimar gasfield off Dampier through Chevron's proposed Wheatstone LNG processing hub near Onslow leaves Woodside without the most obvious source of gas to justify a second and third train at Pluto.

Julimar is thought to contain about four trillion cubic feet of gas and Apache has said in the past it wants to be in production by 2012.

Woodside started developing Pluto with only 5tcf and has since struggled to find more gas. It nonetheless launched front end engineering and design studies for a second and third Pluto train two months ago, raising investors' expectations a third-party gas deal was imminent.

Woodside and Apache had been in confidential talks for about two years.

But, emphasising just how deep a rift developed had between Apache and Woodside, Apache decided to support Chevron even though the Wheatstone timetable is at least one year behind that of an expanded Pluto - therefore jeopardising Apache's Julimar timetable.

The surprise news is likely to rattle Woodside investors this morning because it will raise uncertainty about the viability of Pluto's much-vaunted expansion strategy.

In return for supporting Chevron, Apache will earn a 16.25 per cent stake in the Wheatstone LNG plant. Kuwait's KUFPEC, which owns 35 per cent of Julimar, will earn an 8.75 per cent stake. Wheatstone was wholly owned by Chevron.

Chevron Asia Pacific exploration and production president Jim Blackwell said the securing of "foundation partners" ensured Wheatstone's status as the first LNG project in Australia to "attract large volumes of third party supply gas".

The deal with Apache and KUFPEC also further reduces doubts over whether Chevron will actually develop Wheatstone, given its half-ownership of the just-approved $43 billion Gorgon project.

Woodside tried to shrug off the news last night, claiming it was "ambivalent" about the Apache development and would refuse to agree to unfavourable financial terms.

Woodside owns 90 per cent of Pluto, having ceded only minor interests to two Japanese LNG customers.

A Woodside spokesman said it remained in talks "with a number of parties" - thought to include Hess Corp - about a third-party gas deal.

"Those discussions will continue to be based on the principle of delivering fair returns for those third party gas owners and proper value for Woodside shareholders," the Woodside spokesman said.

"Woodside will not entertain agreements which do not satisfy this principle.

"We begin our 20-plus Greater Pluto exploration program this quarter and we remain confident this campaign will deliver the gas required for a substantial expansion of the Pluto foundation project, which is already about three quarters complete."