Australian independent Santos is aiming to sell off stakes in key domestic offshore assets, including in its Dorado oil and gas project in Western Australia, according to a report.
The company is aiming to sell off a stake of between 20% and 30% in Dorado and the nearby Bedout sub-basin exploration portfolio, Reuters reported, citing a sales document and a later confirmation from Santos.
The news wire also said Santos is considering selling off its entire stake in the Van Gogh oilfield and a stake in the Pyrenees oilfield, also offshore Australia.
Santos, led by chief executive Kevin Gallagher, holds an 80% stake in Dorado and is partnered by compatriot player Carnarvon Petroleum on 20%.
Dorado is one of the most exciting offshore discoveries in Australia in the last decade, with a current recoverable liquids resource of 158 million barrels of oil on a best estimate gross basis.
Upstream reported recently that Santos is reviewing the substructure design of the planned offshore platform for the US$2 billion Dorado project after discovering that seabed conditions are not as expected.
It is a large project that will feature an offshore wellhead platform tied back to a floating production, storage and offloading vessel.
Santos aims to begin the front-end engineering and design phase in the first half of this year and to be ready to start production at the end of 2025.
The process of re-examining the design of the substructure came about following recent geotechnical results that showed the seabed might not be suitable for the jacket Santos had designed, said sources familiar with the Dorado project.
Reuters said on Thursday that the sales documents flagging up Santos’ interest in selling down stakes pointed to an intended final investment decision on Dorado in the first half next year.
"This offering is in line with Santos’ strategy which is to phase growth projects and review equity levels consistent with disciplined capital management," a Santos spokesman said in an emailed statement to Reuters regarding the Dorado and Bedout stake sales.
Santos and Carnarvon recently secured the jack-up Noble Tom Prosser to test two prospects, Pavo-1 and Apus-1, in the Bebout sub-basin near the Dorado oilfield
The programme will kick off later this year, with the Pavo-1 well to be drilled first, targeting an estimated 101 million barrels of oil equivalent in mean prospective resources, consisting of 82 million barrels of oil and 108 billion cubic feet of gas.
The joint venture will then turn its attention to the Apus-1 prospect, which is estimated to hold 307 million boe, consisting of 235 million barrels of oil and 408 Bcf of gas.
A discovery at either prospect has the potential to materially increase the aggregate development resource for the nearby Dorado oilfield, with both prospects providing potential tie-back opportunities.
Reuters also said Santos is considering selling a 52.5% stake in the Van Gogh oilfield off Western Australia, which represents its entire holding.
Santos in March was given approval to begin an infill drilling campaign at the field.
Santos believes the Phase 2 infill development will maximise production, access additional reserves, while also helping lower production costs at the offshore oilfield. It follows on from a two-well infill campaign completed in 2019.
Reuters also said that Santos is looking to sell a 29% stake in the Pyrenees oilfield, which was brought on stream in 2010 by BHP.
"For bidders looking for early production, buying in to Van Gogh and Pyrenees will be an option, but is not part of the core sale," the Santos spokesman told Reuters.
Santos has hired US bank Goldman Sachs to hire the stake sales process.