Australia: Business Deal

Conoco Phillips to Sell Interests in Australia-West for 1.39 Billion Dollars

15/10/2019 | Editor: Ahlam Rais

Production associated with the assets being sold was approximately 50 thousand barrels of oil equivalent per day for the first half of 2019. (Source: Deposit Photos)

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Conoco Phillips will be selling its Australia-West business with operating interests in Darwin LNG, Bayu-Undan, Barossa and Poseidon to Santos. The company will also receive 75 million dollars once the final investment decision has been taken regarding the Barossa development project.

Houston/USA – Conoco Phillips has recently announced that it has entered into an agreement to sell the subsidiaries that hold its Australia-West assets and operations to Santos for 1.39 billion dollars, plus customary closing adjustments. In addition, the company will also receive a payment of 75 million dollars upon final investment decision of the Barossa development project.

The subsidiaries hold the company’s 37.5 per cent interest in the Barossa project and Caldita Field, its 56.9 per cent interest in the Darwin LNG facility and Bayu-Undan Field, its 40 per cent interest in the Poseidon Field, and its 50 per cent interest in the Athena Field. Conoco Phillips will retain its 37.5 per cent interest in the Australia Pacific LNG project and operatorship of that project’s LNG facility. Proceeds from this transaction will be used for general corporate purposes.

“We are extremely proud of our work in Australia-West over the last 20 years. We are pleased that Santos recognises the value of the existing business as well as the opportunity to develop Barossa and thereby continue Darwin LNG’s operations for another 20-plus years,” said Matt Fox, executive vice president and chief operating officer.

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“While we believe the Darwin LNG backfill project remains among the lower cost of supply options for new global LNG supply, this transaction allows us to allocate capital to other projects that we believe will generate the highest long-term value to Conoco Phillips.”

Production associated with the assets being sold was approximately 50 thousand barrels of oil equivalent per day (MBOED) for the first half of 2019 and proved reserves were approximately 39 million barrels of oil equivalent (BOE) at year-end 2018.

The effective date for the transaction will be January 1, 2019. The transaction is subject to regulatory approval and other specific conditions precedent. The sale is expected to be completed in the first quarter of 2020.