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Santos announces FID on major project

02 Mar 2020 12:38 PM | Sonia Harvey (Administrator)

AUSTRALIA’s second-largest gas producer, Santos (52.5%), and joint venture partner Inpex (47.5%) have made a final investment decision on the Van Gogh Phase Two project.

Santos said this morning its decision to go ahead with the second phase would involve extensive infill drilling to maximise field production, access additional reserves and lower unit production costs.

The Van Gogh field is one of three subsea oil field developments located in the Exmouth Basin, offshore Western Australia, which tie into the Ningaloo Vision FPSO.

Santos hit first oil from the Van Gogh infill project in January last year.

Under its phase two development plans Santos will drill three new horizontal production wells which will then be tied back to the Ningaloo Vision.

First oil from the second phase is targeted for late 2021.

Santos contracted the Valaris MS1 drilling rig for the project from early next year.

"It's little more than a year since the start-up of the Phase One, so I'm delighted to see FID being advanced on Phase Two in such a short timeframe," Santos CEO Kevin Gallagher said.

"Phase One proved to be a very successful project, with higher reserves delivered for lower cost, the value of which was enhanced by a strong premium to Brent realised for this crude."

Earlier this month the Santos noted it had been earning up to $30 above the Brent benchmark price for oil from the Van Gogh project. This was due to high demand from Asian refiners as the International Maritime Organisation implemented new laws enforcing a drop in sulfur content in shipping fuel.

Source: Energy News Bulletin

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