Woodside Energy and BHP have reached an agreement over the development of the Scarborough gas field located in WA-1-R off the coast of Western Australia.
Under the agreement, Woodside will become the operator on completion of Woodside’s purchase of ExxonMobil’s 50 per cent interest in the field.
Furthermore, the agreement also outlines that:
- BHP waives its right of pre-emption and provides its consent to the sale by ExxonMobil to Woodside of its 50 per cent interest in WA-1-R and the Scarborough Joint Venture Operating Agreement, resulting in Woodside holding a 75 per cent interest in Scarborough
- Woodside grants BHP an option to purchase an additional 10 per cent interest in Scarborough on equivalent consideration and terms to the ExxonMobil deal. The option may be exercised by BHP at any time before 31 December 2019 and approval to commence from front-end engineering and design (FEED) phase of the project
- Woodside and BHP will undertake good faith discussions in relation to: the unitisation of of WA-1-R and the adjacent WA-62-R (with both holding a 50 per cent interest); potential offers to sell up to a 10 per cent interest in Scarborough to foundation LNG buyers on a pro-rata basis; and technical and commercial arrangements for Scarborough development.
Woodside CEO Peter Coleman said the announcement strengthened the alignment and certainty for the Scarborough development.
“I am pleased BHP has agreed that Woodside will become operator of the Scarborough development,” said Mr Coleman.
“The Scarborough joint venture will now be focused on finalising the development concept prior to entering FEED and positioning for FID in 2020.”
Completion of the transaction between ExxonMobil and Woodside is targeted by the end of Q1 2018.
Once the deal is complete Woodside will have a 75 per cent stake in Scarborough, with BHP holding the remaining 25 per cent.
The Scarborough asset areas include the Scarborough, Thebe and Jupiter gas fields, which are estimated to contain gross 8.7 Tcf of dry gas resources.
Discovered in 1979, the Scarborough field is located off the coast of Western Australia approximately 220 km northwest of Exmouth in 900 m of water.