Hess in Talks With Woodside, Shell for Sale of Australian Gas
By Ben Sharples
July 30 (Bloomberg) -- Hess Corp., the fifth-biggest U.S. oil company, is in talks with Woodside Petroleum Ltd. and Royal Dutch Shell Plc as potential customers for gas from its fields in Western Australia.
“We do have discussions ongoing with both Woodside and Shell,” Gregory Hill, Hess president of worldwide exploration and production, said during a conference call with analysts and investors yesterday. “It’s way too early to be talking about commercial terms or which place we’re going to take the gas.”
Woodside, operator of the A$12 billion ($9.8 billion) Pluto liquefied natural gas project in Western Australia, is seeking reserves held by rival companies to expand the venture. Supplies may come from a field wholly owned by Hess in an area close to large finds made by Chevron Corp. and Exxon Mobil Corp., Citigroup Inc. said in a July 24 note to clients.
Hess plans to drill 12 wells in the permit during the next 12 months to further appraise the field, Chief Executive Officer John Hess said on the conference call. The permit lies to the southwest of the Gorgon and Jansz gas fields, which hold 40 trillion cubic feet of the fuel and which Chevron aims to develop for LNG exports.
Woodside, Australia’s second-biggest oil and gas producer, fell 39 cents, or 0.9 percent, to A$43.84 at 11:21 a.m. in Sydney after oil prices slumped the most in three months. The benchmark S&P/ASX 200 index gained 0.5 percent. Hess dropped 3.5 percent to $51.72 in New York Stock Exchange composite trading.
A design and engineering contract for an enlarged Pluto may be awarded by the end of September, Woodside said last week. The Perth-based company agreed to non-exclusive talks with Apache Corp. and a unit of Kuwait Petroleum Corp. for gas to be sold through a second plant, it said in May.
Yvonne Ball, a Perth-based spokeswoman for Woodside, and Claire Wilkinson, a spokeswoman for Shell’s Australian unit, weren’t immediately available for comment.
To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]
Last Updated: July 29, 2009 22:15 EDT
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