BP has just days to scupper PetroChina's $US1.63 billion ($1.56 billion) plan to buy into the Woodside Browse LNG project.
As Shell manoeuvres to convince its joint venture partners to go with a floating solution for the Browse gas development, pre-emptive rights held by the Woodside Browse partners to match PetroChina's offer for BHP Billiton's about 11 per cent in the consortium are understood to expire early next week.
BP has long been regarded as interested in increasing its about 17 per cent stake in the Browse project because it is underweight in Australian upstream oil and gas when compared with rivals Royal Dutch Shell, Chevron, ExxonMobil and ConocoPhillips.
There has also been a longstanding view in industry circles that BP would like to boost its presence in the region to compensate for the fallout from its Gulf of Mexico Macondo disaster and an ugly exit from the TNK-BP venture in Russia, another of the British giant's most important production areas.
However, BP did not use its pre-emptive to override last year's sale by Woodside Petroleum of a 14.7 per cent stake to Japan's MIMI consortium, or to match Shell's buyout of fellow Browse partner Chevron to increase its own stake to about 27 per cent.
The Shell-Chevron deal involved an asset swap and cash and was therefore difficult to value on a see-through Browse basis.
MIMI, comprising Japanese giants Mitsui and Mitsubishi, paid Woodside $US2 billion for its stake, valuing the entire project's equity at $US13.6 billion.
BHP and PetroChina announced their deal on December 12, triggering a 60-day pre-emptive rights period for the other Browse partners.
BHP, which views its Browse stake as non-core as it pursues hydrocarbon riches in the onshore US, has said it expects the PetroChina deal to be completed in the first half of this year.
In addition to other Browse partners not pre-empting their right, the PetroChina deal remains subject to regulatory approval including from the Foreign Investment Review Board, which should be forthcoming.
Based on PetroChina's buy-in, the Browse project equity is worth as much as $US14.8 billion, highlighting the premium the Chinese group has attached to gaining access to Browse gas.
BP, which is due to report its full-year results in London tonight, would not comment on the Browse pre-emptive right.
Irrespective of which development route the partners take - a floating LNG operation is gaining traction because of the prohibitive costs and widespread community and environmental opposition attached to the James Price Point option - there is worldwide interest in what is one of Australia's biggest gas fields.
It also explains why China and Japan, which have little history operating side by side in Australia, are investing heavily to become cornerstone investors in the Browse project and secure some of the lucrative offtake.