Santos has started its $235 million Phase 3C infill drilling campaign offshore East Timor in an effort to extend the life of the Bayu-Undan field. If successful, the Santos-led Darwin liquefied natural gas (LNG) export plant in Australia, which is fed by the ageing field, will not need to be shut down while new supplies of gas are developed.
Production from Bayu-Undan was initially expected to stop in 2022 without new investment. However, the infill drilling, which includes three production wells, will develop additional gas and liquids reserves, extending field life, as well as production from the offshore facilities and Darwin LNG plant, Santos said today.
Significantly, without the field extension, Santos would have had to maintain the Darwin LNG facilities in northern Australia without any gas supplies for around three years, until the nearby Barossa project could be developed as backfill. Shutting down and restarting the export plant would have been very costly, as Energy Voice reported earlier this year.
Santos said the infill programme will add over 20 million barrels of oil equivalent gross reserves – about 2% of the original reserves – at a low cost of supply. However, the Adelaide-based company has not indicated how long the life of the field would be extended.
Analysis from Wood Mackenzie estimates the three wells should add around three years of production. This would keep gas supplies flowing to the Darwin LNG plant until 2024/2025. The Santos-led Barossa project is expected to start up around 2025/2026.
The infill wells will be drilled using the Noble Tom Prosser jack-up rig with first production expected in the third quarter 2021.
Santos has a 43.4% operated interest in Bayu-Undan. The remaining interest is held by SK E&S (25%), INPEX (11.4%), Eni (11%), JERA (6.1%), and Tokyo Gas (3.1%).