Exxon JV asks for more time
Australia's use-it-or-lose-it crackdown on the owners of gas resources discovered off WA decades ago is set for another test after ExxonMobil and BHP Billiton quietly asked for an extension to their stranglehold on the massive Scarborough field.
The request, at the same time as the Woodside Petroleum-led consortium waits for news on whether its application for a renewal of Browse permits will be granted, comes amid a global collapse in oil and gas prices that is snuffing out the likelihood of any new big-ticket developments.
The Scarborough field was discovered in 1979.
Despite containing an estimated eight trillion cubic feet of gas, Scarborough's lack of hydrocarbon liquids and its 300km distance from Karratha's gas processing infrastructure have held up development.
There had also long been disagreement among the joint owners over preferred development options though BHP in September revealed it had agreed with ExxonMobil's proposal for a floating LNG operation.
However, the retention lease covering the Scarborough field is due to expire in May. The overall project also includes the nearby Thebe gas resource.
An ExxonMobil spokeswoman confirmed yesterday the joint venture had applied for a renewal of the WA-1-R retention lease, and that it was committed to "advancing Scarborough towards a final investment decision".
She would not comment on whether concept select work, to confirm FLNG as the development option, had been finished.
Completing concept selection was one of the requirements ExxonMobil and BHP signed up to when they agreed the retention lease with the Federal Government in 2010. The five-year work program, dominated by studies and technical work, was valued at $50 million.
"FLNG is considered the lead development option for Scarborough," the spokeswoman said.
"Development of Scarborough remains challenged due to location, water depth, ocean conditions and resource characteristics, so innovation and technical leadership are required to improve project economics."
