Santos Sells 25% in Darwin LNG and Bayu Undan Field for $390M

OE Staff
Thursday, March 12, 2020

Australia's oil and gas company Santos will sell a 25% interest in Darwin LNG and Bayu Undan gas condensate offshore field to SK E&S for US$390 million with effect from October 1, 2019 with customary adjustments on completion.

Santos also said it would receive the benefit of approximately US$120 million of cash flow relating to the interests from 1 January 2019 to 1 October 2019. 

The sale is conditional on completion by Santos of the acquisition of ConocoPhillips' northern Australia and Timor-Leste portfolio as announced on 14 October 2019, third-party consents, regulatory approvals and a final investment decision on Barossa offshore project. 

SK E&S already has a 37.5% interest in the Barossa project to backfill Darwin LNG. 

Santos' sale of interests in Darwin LNG and Bayu-Undan to SK E&S advances partner alignment for the development of Barossa, which remains a key priority for both companies. 


Related: Santos Acquires ConocoPhillips’ Northern Australia Interests


Santos Managing Director and Chief Executive Officer Kevin Gallagher said the agreement with SK E&S builds partner alignment and is another significant step towards bringing Barossa gas into production through the Darwin LNG facilities. 

"We are delighted to have agreed terms with SK E&S to acquire interests in Darwin LNG and Bayu-Undan and look forward to continuing and building on the long-term relationship between our two companies." 

Working on Barossa FID

Gallagher said: "Santos continues to build alignment between the Darwin LNG and Barossa joint ventures through discussions with Darwin LNG participants and others to acquire equity in Barossa. We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40% to achieve increased partner alignment." 

He said: "Santos expects to take a final investment decision for the development of Barossa following completion of the ConocoPhillips acquisition and once all necessary technical, engineering and commercial contracts are in place, including the processing agreement with Darwin LNG, to allow the project to proceed subject to market conditions," 

As announced in October 2019, Santos' net funding requirement for the ConocoPhillips acquisition is expected to be approximately US$775-825 million, net of the proceeds realized from the sell-down to SK E&S and post the benefit of cash flows generated from the acquired business from the ConocoPhillips acquisition effective date of January 1, 2019, to completion with customary adjustments.

Categories: Energy LNG Mergers & Acquisitions Industry News Activity Production Gas Australia/NZ

Related Stories

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

CNOOC Brings New Offshore Gas Field On Stream

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Woodside Finds South Korean Partners to Advance LNG Value Chain

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com