The joint venture between Santos and Carnarvon Energy has suspended the development of the US$2 billion Dorado oil project offshore Western Australia due to cost pressures and supply chain uncertainties.

Santos said in its half-year results announced on Wednesday that an “inflationary cost environment and supply chain uncertainty [do] not support FID in 2022”.

Carnarvon said in a separate statement that the risk of cost escalation was “unacceptably high and requires fiscal discipline until this environment shows signs of stabilising”.