Woodside to workwith East Timor

WOODSIDE Petroleum Ltd says it will work with the East Timor and Australian governments to ensure its planned $6.6 billion Sunrise project in the Timor Sea is approved in a timely manner.

A stalemate between over the development looked set to drag on after an Associated Press report on Wednesday said the East Timor government would not support Woodside's development plan.

The plan will involve either a floating offshore processing vessel or a pipeline to an expanded Bayu Undan LNG plant at Darwin.

East Timor has long called for a processing plant to be built on its shores.

"Woodside and its joint venture participants are finalising a development theme selection that will accord with key treaty requirements,'' the energy giant said in a statement today.

"Following selection of the preferred concept, Woodside will work with the Timor Leste and Australian governments to secure the timely approval of a field development plan to develop Sunrise.''

Woodside last month said it was targeting a final investment decision by the end of this calendar year.

The latest comments by the East Timor government appeared to derail a 2006 treaty between the two nations that increased East Timor's share of Sunrise revenues to 50 per cent, from 18 per cent under a 2003 agreement.

Hartleys oil and gas analyst David Wall said Woodside had previously resisted the pipeline to East Timor concept, saying a trench in the ocean floor between Sunrise and the southeast Asian nation made the proposal uneconomic.

He said friction over the matter had "never gone away''.

"It will probably be floating LNG,'' Mr Wall said.

"It's a disagreement on tax, really.''

Mr Wall said the project could prove a much-needed boost to East Timor's economy.

But its government could hold out for a bigger prize, he said.

"The Timorese need the tax dollars.''

Woodside said the development of Sunrise would deliver significant social benefits to East Timor as well as petroleum revenues and taxes.

The company shelved Sunrise in 2005 and has for the past few years described it as being at the end of its long pipeline of projects.

"Woodside is not going to be short of projects (if Sunrise is blocked),'' Mr Wall said.

Sunrise lies partly within the Joint Petroleum Development Area while the remainder virtually straddles the territorial waters between Australia and East Timor.

Woodside and joint venture partners Shell, Osaka Gas and ConocoPhillips have spend hundreds of millions of dollars exploring and studying the Sunrise fields.

They were discovered in the mid-1970s and are estimated to hold about 5.13 trillion cubic feet of gas plus about 226 million barrels of condensate, a form of light crude oil.

Source: The Daily Telegraph

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