BP farms into giant North West Shelf prospect

Just days after announcing its withdrawal from the Great Australian Bight, BP Australia has acquired an 80% equity and operatorship of offshore Western Australian permit WA-409-P, which contains a giant Triassic-age Mungaroo formation prospect in the Carnarvon basin named Ironbark.

BP has farmed into the prospect formerly held 100% by Melbourne-based Cue Energy Resources Ltd. Cue retains 20% interest.

The deal entails BP funding 100% of the work program required for the permit for its first 3 years. BP also has an option until May 2017 to acquire a 42.5% equity in permit WA-359-P, which is immediately south of WA-409-P. If BP does exercise the option, it will fund 50% of the cost of drilling a well in the second permit.

A well in WA-359-P is scheduled for first-half 2018, and BP will assist Cue in securing partners for drilling this well.

The Ironbark prospect, which could potentially hold 15 tcf of gas, has an aerial extent of 400 sq km and lies about 40 km north of the North Rankin and Goodwin field infrastructure owned by the Woodside Petroluem Ltd.-led North West Shelf joint venture of which BP is a participant.

The prospect straddles WA-409-P and WA-359-P and is in moderate water depths. If exploration is successful it has been noted that the North West Shelf LNG plant and infrastructure will have spare capacity from 2021. The Woodside-operated Pluto and the Chevron-operated Wheatstone pipeline infrastructure also is within reach.

BP’s Ironbark farm-in deal has been in negotiation for some time and is understood to have predated the company’s decision to cancel the Great Australian Bight drilling program.

On that front, BP is now working with its partner Statoil and the Australian government to reach an agreement on how to honor its drilling commitments off South Australia.

Statoil, which has 30% of the Bight permit, has said it is not ready to assume the commitments of BP that are necessary to proceed with the exploration program as planned.

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