SANTOS has completed the acquisition of ConocoPhillips’ entire Northern Australia portfolio, for a cheaper price than first announced thanks to lower oil prices, with the price revised down from US$1.4 billion to $1.25 billion.

However the deal also sees an increased contingent payment of $200 million on sanction of Barossa, up from an original $75 million.

In March Santos announced it was delaying final investment decision on the backfill project given uncertain market conditions. 

Santos would take the US company's Northern Australia portfolio, leaving ConocoPhillips with only its non-operated interest in the Australia Pacific LNG venture in Queensland, which when the October deal was struck it saw as too cash-generative to give up. . 

"At completion, the net settlement amount was US$655 million, lower than the previously forecast amount of US$800 million, comprising the revised firm purchase price of US$1.265 billion less cash in the acquired business from the effective date of 1 January 2019 to completion with customary adjustments," Santos said in a statement. 

"The net settlement amount is before any sell-downs of interests owned by Santos in the acquired assets."

As of today Santos holds a 68.4% interest in the declining Bayu-Undan gas field  and the Darwin LNG it feeds. 

The company also now effectively owns a 62.5% stake in the Barossa project, due to go to DLNG, and Caldita field, a 40% stake in the Poseidon field, and a 50% stake in the Athena field.

It signed a letter of intent to sell down a further 12.5% interest in the Barossa project to Japan's JERA, and has a firm agreement to sell down a 25% stake in Darwin LNG and Bayu-Undan to SK E&S. 

"We are delighted to assume operatorship and continue to progress the Barossa project so that a final investment decision can be made when market conditions permit," Santos chief Kevin Gallagher said. 

"We welcome the ConocoPhillips' Australia-West employees to Santos and look forward to getting on with the process of integrating our two businesses to create one high performing team." 

Source: Energy News Bulletin

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Australia's chief scientist said gas would remain a crucial part of Australia's energy mix for the next 10-30 years, but noted it would be used "less and less" frequently as renewables and battery storage take the lion's share of the energy mix. 

"We can bring vastly more renewable electricity if we support it, and in the short term the best way to do that is with gas," he said. 

Former Lord Mayor of Sydney Lucy Turnbull questioned the legitimacy of the government's rhetoric around a gas-fired economy, noting the Paris Agreement's goal of net zero emissions by 2050 which the government has signed on to.

"We have to reconceive our world in the post-COVID world as a post-carbon world and we do that by actually looking forward and that's the opportunity we have now," she said. 

"We should aim to have the emission profile and aspirations of Denmark, with the energy costs of Saudi Arabia." 

Source: Energy News Bulletin

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THE government of Timor-Leste has finally enacted its long awaited onshore petroleum laws.

Currently Nepean subsidiary Timor Resources is progressing its drilling campaign in the south of the country searching for oil in a ten-well campaign after a busy 2D seismic acquisition campaign last year. 

The law has been pending promulgation since February last year in the small, politically tumultuous nation.

The law is not just crucial for operations already underway by Timor Resources but also for the current bidding round that ends in October. 

The offer, which has 11 offshore and seven onshore blocks up for grabs, is the first since 2005, and was launched at its inaugural oil and gas conference in capital Dili last October,  and is set to close this October. Since then the nation's top oil and gas officials have been on the conference circuit trying to drum up interest. 

For the first time several onshore blocks are being offered in the frontier areas in the north of the country, though data is sparse. 

According to Miranda Partners, a Portuguese law firm active in the country, "The new rules cover all petroleum operations carried out onshore Timor-Leste, under the Petroleum Activities Law, from exploration, appraisal, development and production to abandonment, including the transport, processing and storage of crude oil and natural gas in an upstream context."

The law, Decree-Law No. 18/2020, will also apply to onshore facilities that service offshore operations. 

There are specific rules on operations, safety and local content.

Other provisions also include land access, relationships with local communities, and the installation and later abandonment of pipelines  

The laws will come into force 90 days after being published in the nation's official gazette.

Timor Resources  is hunting for oil on the south coast, home to several historic wells and some oil seeps and plans an eventual 10-well campaign , with five wells this year in one permit it operates under a production sharing contract arrangement with the Dili government and five more in its other permit in early 2021. 

Source: Energy News Bulletin

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AUSTRALIAN onshore explorer Empire Energy has appointed an old hand in the oilfield sector to its board, as interest grows in the small cap which owns a massive 13 million acres in the Northern Territory across the Beetaloo and McArthur Basins.

Yesterday afternoon, Empire announced it had appointed Peter Cleary to its board citing his commercial relationships and industry experience as an asset for the company.

Cleary is a familiar face in the oil and gas sector, having worked in senior leadership roles at Santos, the North West Shelf joint venture, and at BP in Asia. 

During his tenure at BP he was president of the North West Shelf Australia LNG, the marketing company for the Woodside Petroleum-led North West Shelf Joint Venture. 

He developed senior venture relationships with LNG buyers and governments in international markets, particularly China. 

Cleary's work at Santos was also LNG-focussed, possibly suggesting some pretty large ambitions by the junior. 

The board of directors told shareholders yesterday, Cleary's industry experience, relationships and track record would be "of particular value" to the company as it looks to progress its Northern Territory acreage from exploration stages to appraisal and ultimately commercialisation. 

The appointment comes as multiple analysts find Empire Energy an attractive investment following the release of new prospective resource estimates. 

Source: Energy News Bulletin

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MULTIPLE analysts have rallied behind Empire Energy after independent estimates almost doubled the amount of gas across the company’s permits in the Northern Territory.

Last week, independent oil and gas research firm Netherland, Sewell & Associates estimated Empire's entire portfolio, spanning 14 million acres, holds a combined 13.46 trillion cubic feet of gas on a 2U best estimate basis. 

Independent investment research houses; RaaS Group; Blue Ocean Equities; and Taylor Collision, all noted the "growing prospectivity" of the Beetaloo Basin and Empire Energy's prime real estate in the region

The massive increase in estimated gas in place was described by Empire managing director Alex Underwood last week as an "exciting and substantial resource for a company of its size." 

The frontier NT shale play has attracted international attention, which the Territory government hopes will turn into investment in the vast gas and liquids-rich Beetaloo and McArthur Basins. 

The jump in resources has seen at least three different consulting firms to up their ratings of Empire Energy, citing the massive resources as "exciting" with multiple commercialisation options.

RaaS noted the new estimate of 13.5 Tcf of gas "crystalised Empire Energy's longer-term potential" if the company's drilling program was successful.

"Given the region's high prospectivity, success from future drill programs could see cashflows within 36 to 48 months, assuming links and upgrades to existing pipeline infrastructure are delivered in parallel," RaaS analysts said. 

Raas have increased its base case valuation of the company by 20%, to $159 million, or 61 cents per share.  

"Empire has a number of event drivers over the next six to 12 months which in our view hold potential to confirm and expand this sizable uplift in net asset value." 

Raas Group's view is echoed by fellow research houses Blue Ocean and Taylor Collision. 

While Blue Ocean Equities analyst Garry Marsden believes Empire is still a speculative buy, he noted Empire is the only Australian listed small cap with exposure to the massive gas province of the Beetaloo, and its assets could be commercialised in both Darwin for international export markets as LNG and the east coast markets for domestic use. 

Blue Ocean lifted its base value of Empire by 55% from 49 cents per share to 76 cents based on the upgraded potential of the Beetaloo acreage. This would give the company a market cap of $203 million. 

Taylor Collision also released its own view following Netherland, Sewell & Associates report. 

"Although it is early stage activity, the confidence level associated with the gas potential remains relatively high and Empire Energy is sitting on an extensive gas resource," analyst Andrew Williams noted. 

"Based on increased gas potential, confidence levels, and adjustments to risk weightings, we value the company in a range of $81 million to $389 million." 

This would equate to around 31 cents to $1.47 per share.

Source: Energy News Bulletin

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WORK has been progressing in recent weeks to advance Sun Cable’s Australian-ASEAN Power Link super project in the Northern Territory, designed to export huge amounts of renewable electricity from Australia to Singapore and Indonesia via subsea cable.

The project has backing from tech billionaire Mike Cannon-Brookes and from Andrew Forrest's energy company Squadron, which is also part of consortium called Australian Industrial Energy which is progressing an LNG import terminal in New South Wales. 

The project involves generating three gigawatts of electricity from a 15,000 hectare solar array near Tennant Creek, supported by battery storage, which will then be transported via a 3800km high voltage direct cable to provide one-fifth of Singapore's electricity supply. 

Last week Perth-based Guardian Geomatics was awarded a cable route survey contract by Sun Cable Pty, with plans to use offshore vessel "Offshore Solution" to deliver work starting later this year. 

"Guardian Geomatics are always on the lookout for opportunities to improve our footprint and sustainability - this project is a step in the right direction and something we are very proud of," Guardian Geomatics commercial director Steve Duffield said.  

"Sun Cable is thrilled to have engaged Guardian Geomatics to undertake this critical survey work," Sun Cable CEO David Griffin said. 

Meanwhile, Sun Cable is progressing early contract work for its Middle Arm battery project, ultimately designed to firm up supply from the Power Link. 

Project design is scheduled to start in the third quarter of  this year, with the battery expected to be commissioned and online by the second quarter of 2022. 

The proposed site will be east of the existing Weddell Power Station, with an installed capacity of 50MW scalable to 500MW. 

The project is designed to initially provide active power and ancillary services to the Darwin-Katherine Integrated System.

Source: Energy News Bulletin

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OPERATOR Neptune Energy yesterday announced it is pressing on with its planned exploration of the Petrel oil and gas field in the Bonaparte Basin offshore northern Australia.

Neptune holds a 54% interest in the project alongside Australia's second largest gas producer Santos (40.25%) and Beach Energy (5.75%). 

Late yesterday Neptune told shareholders it had successfully completed the first step in its exploration campaign, namely a 3D seismic survey across two permits north of Western Australia and the Northern Territory. 

The Petrel field is the largest of three gas fields being considered for development by Santos, Beach and Neptune. The other smaller fields include the Tern and Frigate fields which are both wholly owned by Santos. 

The three fields were to be developed by Santos and GDF Suez using a floating LNG facility but those plans were shelved in mid-2014 after oil prices plummeted. However when Neptune came to the party, hopes for the development returned. 

"The seismic survey was the first significant investment in this part of the Bonaparte basin in more than five years and it continues to present exciting future growth opportunities for Neptune offshore Australia," managing director Janet Hann said.

Seismic acquirer Polarcus was contracted to carry out the survey in 2019. The survey was undertaken across NT/P84 and WA-454-P in water depths between approximately 73m to 107m.

Neptune has received some of the initial findings from the seismic, but data processing is expected to be completed later this year.O

Source: Energy News Bulletin

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Leading energy infrastructure company Jemena has joined forces with Saltbush Social Enterprises, part of the Karen Sheldon Group, to deliver a new Indigenous Workforce Mentoring Program: Pipeline to Success.

Jemena’s Managing Director, Frank Tudor said: “This program has been specifically developed for disadvantaged Indigenous job seekers in the Northern Territory’s Barkly region. It aims to equip participants with mentoring and leadership skills so they can support other members of the community into part-time and full-time employment.”

“Through our Northern Gas Pipeline project, we saw many local people participate in learning and development opportunities which ultimately enabled them to contribute to the successful construction of the $800 million gas pipeline. The Pipeline to Success initiative builds on this model and our hope is that through this program we will contribute to the broader economy of the Barkly region, while also identifying and mentoring a talent pool which is potentially capable of working on the Northern Gas Pipeline in the future.”

Mr Tudor congratulated the program’s inaugural mentor, Becky Limerick of the Wakaya people.

“We are delighted Becky has completed six months of training in which she learned about attendance, communication, team work and computer skills. We’re thrilled to hear Becky is already mentoring others and promoting the benefits of this course to her community.

“Becky’s positive experience has paved the way for the program to expand and two more members of the local Indigenous community are now participating.” Mr Tudor said.  

Mr Tudor said Saltbush Social Enterprises was selected to deliver the program after Karen Sheldon Training, part of the Saltbush group, co-delivered Jemena’s Gas Operator Training Program as part of the delivery of the Northern Gas Pipeline.

“Jemena has a long history of connecting with the local community and is building a legacy of support. This latest initiative will enable local Indigenous people to develop employment skills and career opportunities through mentoring. The program will provide an environment in which local people can receive training and receive skills-based learning while respecting their culture,” said Karen.

Image 1: (left to right) student mentor Becky Limerick with Claire Keen

Image 2: (left to right) Jemena MD Frank Tudor, Karen Sheldon Group MD Karen Sheldon and Jemena Corporate Development Manager NT, Brendan Bourke.

About Jemena

Jemena is an $11.5 billion company that owns and manages some of Australia's most significant gas and electricity assets. These include:

·                     the Jemena Gas Network servicing 1.4 million customers around NSW

·                     the Eastern Gas Pipeline which delivers gas from Victoria's Gippsland basin to the ACT, Sydney and regional NSW

·                     the Darling Downs Pipeline Network in south-east Queensland supplying Darling Downs Power Station and APLNG’s export pipeline

·                     the Queensland Gas Pipeline which supplies Gladstone and Rockhampton

·                     Jemena's Victorian electricity network which delivers electricity to over 350,000 homes and businesses in northern and western Melbourne

·                     the Northern Gas Pipeline between Tennant Creek in Northern Territory to Mount Isa in Queensland.

Jemena also part-owns the ActewAGL electricity and gas distribution networks in the ACT and United Energy, which supplies electricity to more than 600,000 customers across south-eastern Melbourne and the Mornington Peninsula.

For more about Jemena, visit www.jemena.com.au

About Saltbush Social Enterprises

Saltbush is a not-for-profit organisation developed in response to the urgent need for opportunities that create prosperity parity for First Australians in the Northern Territory. Saltbush provides and supports genuine opportunities for self-determination and prosperity parity for all Aboriginal Territorians through their employment services, intensive mentoring, counselling and Supported Bail Accommodation.

For more about Saltbush Social Enterprises, visit www.saltbushnt.org.au

About the Karen Sheldon Group

All Karen Sheldon Group enterprises focus on the shared vision of prosperity parity for all Territorians. The focus is on providing Indigenous employment and training opportunities that assist jobseekers transition from welfare dependence towards sustainable employment, careers and small business opportunities.

THERE is no silver bullet to Australia’s current domestic economic woes, but federal minister Karen Andrews today reiterated the federal government’s intentions to remove environmental red tape and put the pedal to the floor for future oil and gas development.

In a speech to the National Press Club today the minister for Industry, Science and Technology Andrews acknowledged the severe hit business had taken to investment due to the coronavirus pandemic. 

While the minister's carefully curated oration focussed on building the manufacturing sector, gas and energy were a key component to her remarks. 

Andrews said energy and technology was a "national priority" and would underpin Australia's manufacturing sector and domestic economic recovery. 

She said she was working "closely" with resources minister Keith Pitt and energy minister Angus Taylor to ensure affordable gas prices for the manufacturing industry and flagged a comeback of affordable steel production and exports as an underlying area of domestic economic recovery. 

"I am at the consumer end. For Australian manufactures I want to make sure they get the best energy prices they can."

Specifically, Andrews flagged a revival of Australia's steel manufacturing sector, despite a global oversupply of steel. 

This would rely on affordable electricity and gas prices, and the government is not yet considering hydrogen, according to Andrews. 

Hydrogen-led ‘green steel' is one idea put forward by centrist think tank the Grattan Institute to drive Australian green jobs and manufacturing while replacing those lost from retirement of coal mines. 

"We need to ensure our steel manufacturers are getting the best energy costs. Energy is a critical input to them. I encourage them to look at how they are going to minimise their energy costs, but hydrogen [is still in early stages]" Andrews said. 

The minister said she understood business was investing heavily in the future energy source, but Australia was a "resource rich nation" and the government was already looking at "how and if" hydrogen could become an export further down the track. 

"Hydrogen is something we are investigating… but it is something a number of years away and it won't be in place for several years to come." 

Instead, Andrews is betting on natural gas being the primary feedstock for manufacturers. 

The minister used her speech to spruik the government's plans to further reduce the price of gas in wholesale markets, saying "cheaper gas" and "reduced cumbersome red tape" would benefit business and improve access to export markets by making products like steel cheaper. 

Source: Energy News Bulletin

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Background

• The NT Onshore Gas Support Industry – Statement of Capacity is now available in hardcopy
• This report supports the NT Gas Service and Supply Plan which was released in March (link here: https://business.nt.gov.au/publications/strategies/gas-service-and-supply-plan)
• The Service and Supply Plan aims to maximise opportunities for NT service and supply businesses in the oil and gas sector, and will help businesses adapt to the dual impacts of the oil price shock and COVID-19.
• The Plan has three key focus areas:

1)    Strengthen the commitment to local content by gas operators and contractors
2)    Grow local workforce and business capability
3)    Strategically develop the service and supply ecosystem

• This Statement of Capacity is a significant step towards delivering opportunities for the NT service and supply sector.

Key Messages

• The NT Onshore Gas Industry Statement of Capacity:
• • Is a forward-looking assessment of the potential demands of an onshore shale gas industry in the NT,
  • identifies the capacity of the NT service and supply sector to meet the needs of a future NT shale gas industry, and
  • identifies gaps in capacity and opportunities for NT businesses to work proactively to prepare for a future onshore shale gas industry.
• A corresponding offshore industry statement of capacity will be released shortly, which has measured actual operational spend on the LNG projects serviced out of Darwin Harbour and the potential for NT companies to compete for a greater slice of the service and supply pie.
• The Northern Territory Government remains committed to achieving its visions for a world-class gas production, manufacturing and services hub by 2030.

For more information, contact:

Sean Reddan

Principal Industry Development Officer, DTBI

 sean.reddan@nt.gov.au

m: +61 436 613 179