Big Australian oil prospect draws interest from majors

Santos and Total have the option to help fund a survey of what could be a billion-barrel prospect off Australia's north coast.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Dec. 12, 2017 at 5:50 AM
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Dec. 12 (UPI) -- Australian energy company Santos and French supermajor Total may be on board with funding for one of Australia's biggest oil and gas prospects, a partner said.

Australian energy company Melbana, typically known for its ongoing work in Cuban oil programs, said Santos and Total may be completely funding a seismic survey to get a better understanding of the potential in Beehive prospect off the northern shores of Australia.

Melbana holds the complete stake in the license area in question and said Tuesday that Santos and Total have the option to take an 80 percent participating interest in a permit it says may be a "multi-billion barrel" prospect.

Melbana CEO Peter Stickland said the interest from the two companies is a testament to the potential in Beehive.

"Melbana welcomes Total and Santos as partners and we are excited by the opportunity to unlock the huge potential of the Beehive prospect for our shareholders," he said in a statement. "We will now proceed to work with our partners to ensure the 3D seismic survey gets underway as soon as possible."

In a separate statement, Santos added that the license area in question is either next to or within reach of nearby production infrastructure, so Beehive has the potential to enter commercial operations quickly if an actual discovery is made.

Melbana said planning for the survey is already under way and the formal acquisition from Santos and Total is expected by the middle of next year.

In Cuba, Melbana estimates it would cost at least $10 million to drill two wells in Cuba. Its partnership agreement with Petro Australis Ltd. fell apart because of the lack of approval from regulatory authorities, leaving Melbana with a 100 percent stake in Cuban operations and without a partner that would carry 40 percent of the drilling costs.

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