29/06/2021 - 13:00

Santos on the road to Dorado

29/06/2021 - 13:00

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Engineering work for the $US2 billion Dorado oil and gas project will soon get under way, proponent Santos said, with a final decision due mid-2022.

Santos on the road to Dorado
Santos boss Kevin Gallagher. Photo: Attila Csaszar.

Engineering work for the $US2 billion ($2.7bn today) Dorado oil and gas project will soon get under way, proponent Santos said, with a final decision due mid-2022.

Santos today launched front-end engineering and design (FEED) for the project planned off the Pilbara coast, although some of the design contracts are yet to be awarded.

The project will involve two phases.

The first will be oil and condensate production with a wellhead platform and a floating production, storage and offloading facility.

Stage two will develop the gas resource, which will supply Santos’ existing domestic gas assets in Western Australia.

Feed work for Dorado had initially been targeted for June 2020, but this was delayed as the pandemic hit and oil prices collapsed.

Santos also said it would drill the Pavo and Apus prospects early next year to potentially tie-in to Dorado.

Santos chief executive Kevin Gallagher said Dorado would initially produce between 75,000 and 100,000 barrels per day of oil, which could earn a premium over regional pricing benchmarks.

“Entering Feed for the Dorado project is a significant milestone and has the project on schedule for a final investment decision around mid-2022, building on the investment decision on the Barossa gas project earlier this year,” he said.

“Dorado is on track to be the first development in the Bedout Sub-basin, with its high-quality reservoirs and shallow-water setting, making it a very cost-competitive project globally.

“Dorado is also a very low CO2 reservoir with approximately 1.5 per cent CO2, and with all gas reinjected in the initial phase, making it one of the lowest emission intensity oil projects in the region.

“After the initial phase of liquids production, gas export from the development allows for a future source of supply into our domestic gas infrastructure in WA.”

Contracts for the FPSO and WHP design would be finalised in coming months, the company said.

West Perth-based Carnarvon Petroleum partly owns some of the tenements involved in the project.

The company said it had engaged advisers and would select financiers once contracts for design had been finalised.

“The Dorado project is a world-class resource and we are very pleased to commence FEED,“ chief executive Adrian Cook said. 

“This is an important step which has us on track to achieving a final investment decision around mid-2022.

“This will be the first development in Bedout Sub-basin, containing high-quality reservoirs and fluids in shallow water which we expect to result in strong returns for our shareholders.

“We are also on track to test two large exploration targets near Dorado that have the potential to materially add value to the Dorado project.”

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