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ConocoPhillips to sell interests in Australia-West for $1.39 billion

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LNG Industry,

ConocoPhillips has announced that it has agreed to sell the subsidiaries that hold its Australia-West assets and operations to Santos for $1.39 billion, plus customary closing adjustments.

In addition to this, ConocoPhillips claims that it will also receive a payment of $75 million upon the final investment decision (FID) for the Barossa development project. According to the statement, the subsidiaries hold the company’s 37.5% interest in the Barossa project and Caldita Field, its 56.9% interest in the Darwin LNG facility and Bayu-Undan Field, its 40% interest in the Poseidon Field, and its 50% interest in the Athena Field. ConocoPhillips claims that it will keep its 37.5% interest in the Australia Pacific LNG project, as well as operatorship of that project’s LNG facility. Proceeds from this transaction will be used for general corporate purposes.

Matt Fox, executive vice president and chief operating officer, said: “We are extremely proud of our work in Australia-West over the last 20 years. We are pleased that Santos recognises the value of the existing business as well as the opportunity to develop Barossa and thereby continue Darwin LNG’s operations for another 20-plus years.

“While we believe the Darwin LNG backfill project remains among the lower cost of supply options for new global LNG supply, this transaction allows us to allocate capital to other projects that we believe will generate the highest long-term value to ConocoPhillips.”

Production associated with the assets being sold was approximately 50 000 barrels of oil equivalent per day for 1H19, and proved reserves were approximately 39 million barrels of oil equivalent at year-end 2018.

According to the statement, the effective date for the transaction will be 1 January 2019. The transaction is subject to regulatory approval and other specific conditions precedent. ConocoPhillips expects the sale to be completed in the 1Q20.

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