Woodside Petroleum rejects East Timor claims

WOODSIDE Petroleum has rejected claims that it failed to provide East Timor with justification for its decision not to develop the Greater Sunrise gas fields in the Timor Sea through a liquefied natural gas plant in the fledgling nation.

East Timor has reacted angrily to the decision, declaring the Perth oil and gas company had not done enough work to justify jettisoning the concept of an East Timor LNG plant.

Last month, Woodside confirmed it had also rejected a Darwin LNG plant, in favour of a floating LNG plant.

It is understood Woodside has tried to deliver documents to East Timor's National Petroleum Authority with analysis showing floating LNG was the cheapest option and an East Timor plant the most expensive.

According to the documents' cover letter, dated May 18, the presentation contained "A comprehensive analysis of the economic outcomes for each of the downstream development options and the establishment of an integrated development schedule indicating first gas in 2017".

Whether the East Timor government has seen the report is another matter.

After meeting Woodside executives Jon Ozturgut and Brendan Augustin, Petroleum authority president Gualdino da Silva refused to accept the documents, throwing them into the Woodside pair's car as they left.

Mr da Silva has reportedly said the two executives left the meeting without shaking hands or saying goodbye after he had told them he could not accept the documents.

But a Woodside spokesman said the meeting was cordial and denied the pair had walked out.

It is understood email versions of the documents could have made their way to East Timorese officials.

Deutsche Bank analyst John Hirjee estimates Woodside and its partners, Shell and ConocoPhillips, will need $US11 billion ($12.9bn) to develop the fields through a floating LNG plant.

He puts the chance of the project going ahead at 30 per cent.

Woodside has told East Timor the project would deliver $US13bn of revenue to the country over the project's life.

A Woodside spokesman said yesterday that international treaties between Australia and East Timor, which each own half the project's gas resources, meant the fields needed to be developed to the best commercial advantage, and that a plan to do so had been submitted to regulators in both nations.

source: The Australian

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