Woodside, BHP plan Scarborough FID before merger completion
Woodside and BHP plan a final investment decision (FID) for the Scarborough project by the end of the 2021 calendar year, before the proposed completion date for their merger, they said on August 17.
The merger of Woodside and BHP’s petroleum businesses, which was announced on August 17, is expected to be completed in the April-June quarter of 2022. Woodside and BHP are partners in the greater Scarborough fields in the Carnarvon basin offshore Western Australia.
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As part of this plan, the companies have agreed on an option for BHP to sell its 26.5% interest in the Scarborough joint venture and its 50% interest in the Thebe and Jupiter joint ventures to Woodside if the Scarborough FID is announced by December 15, 2021.
The option is exercisable by BHP in the second half of the 2022 calendar year and if exercised, consideration of $1bn is payable to BHP with adjustment from effective date of July 1, 2021. An additional $100mn is payable contingent upon a future FID for a Thebe development.
The Scarborough field contains an estimated contingent resource (2C) dry gas volume of 11.1 trillion ft3. Earlier this month, Woodside announced it had raised the cost estimate for its Scarborough project by 5% to $12bn. The gas from the project will be used as feedstock for a second train at the Pluto LNG project.
Woodside and BHP are also partners in the North West Shelf LNG project offshore Western Australia, where they each own a 16.6% stake.