Santos said today it has launched the front-end engineering and design phase for the Dorado oil project offshore Western Australia, but the operator has still not awarded the FEED contracts.
Dorado is a US$2 billion development, assuming a purchased floating production, storage and offloading (FPSO) vessel, said Santos.
The project seeks to develop about 158 million barrels of recoverable oil in the initial phase, and then commercialise the gas reserves in the second phase.
“Entering FEED for the Dorado project is a significant milestone and has the project on schedule for a final investment decision around mid-2022, building on the investment decision on the Barossa gas project earlier this year,” said Santos chief executive Kevin Gallagher.
However, FEED contracts for the FPSO and the offshore wellhead platform are a few months away from being awarded, added Santos.
When asked why Santos had launched the FEED without FEED contractors, a spokesperson for the operator said: "Santos is well advanced with the FEED contracting process and has established the Dorado FEED team which is already working on the FEED phase."
Santos' joint venture partner Carnarvon Petroleum said it has engaged advisers to fund its share of the development and will formally engage with financiers once FEED contracts for the FPSO and WHP have been finalised.
For the FPSO, three major companies are competing for the contract - Altera Infrastructure (formerly Teekay), BW Offshore and Modec.
For the platform, it is a three-horse race between McDermott International, Saipem and Sapura Energy.
Gallagher said Dorado is expected to have an initial gross oil production rate of between 75,000 and 100,000 barrels per day of high-quality oil that is expected to earn a premium to regional pricing benchmarks.
Santos has an 80% operator interest in the project with the remaining 20% held by Carnarvon; Santos is seeking to divest some of its interest.