Woodside clears decks ahead of Timor development

Woodside Petroleum is selling a series of non-core assets for about $170 million, just as a political deal over maritime boundaries in the Timor Sea could clear the way for its $5 billion Sunrise gas project to be revived.

Woodside announced today that it would sell its 10.24 per cent stake in its west African Chinguetti oil project partner, Hardman Resources, for $118.3 million.

Separately, Woodside announced it had sold its interest in three offshore gas fields north of Australia for a total of US$30 million (A$40 million).

The most significant was Woodside's 53.85 per cent interest in the Blacktip gas field, which it sold to its joint venture partner Eni Australia.

Woodside and Eni had planned to develop Blacktip, based on a deal to supply alumina producer Alcan. However the proposal was halted early this year after Woodside concluded it was not commercially attractive.

Eni has also bought Woodside's 50 per cent interest in the Penguin field and has agreed to buy Woodside's interest in the Rubicon and Prometheus fields, subject to the consent of other joint venturers.

Potentially the most significant news for Woodside was foreign minister Alexander Downer's announcement that Australia has reached an agreement with East Timor over maritime boundaries in the Timor Sea.

The long-running dispute between the two countries had stalled the development of its 33 per cent-owned Sunrise gas project because of uncertainty over royalties.

Woodside welcomed the announcement but was cautious in its response.

It said the agreement needs to be formally ratified by both parties and then signed.

"The future of the Sunrise Gas Project remains dependent on several factors, including the fiscal regime under which it would operate, the cost and location of any development and the successful marketing of the resource," Woodside said in a statement.

Woodside may also choose to focus its efforts on other projects.

The Woodside-managed North West Shelf Venture is currently spending $2 billion on a fifth LNG train and is likely to approve the $1.6 billion Angel LNG project this year.

Woodside has also been bullish about development of its wholly-owned Pluto gas project, expected to cost about $5 billion, and later its Browse Basin gas fields.

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