Carnarvon Energy close to sealing Dorado deal

Australia’s Carnarvon Energy is on track to this quarter complete the sale of 10% stake in Bedout basin assets in Australia to Opic Australia, a wholly owned subsidiary of Taiwan’s CPC Corporation —a deal which will help carry Carnarvon through the Dorado field development offshore Western Australia once the project is sanctioned.

Under the Sale Agreement, Carnarvon will receive a total cash consideration of US$146 million, comprising an upfront payment of US$56 million on completion of the transaction, and a further carry of US$90 million towards Carnarvon’s share of the Santos-operated Dorado project costs once the final investment decision is taken.

Santos is now aiming to have the US$2 billion Dorado oilfield development ready for sanction in 2024 after last August applying the brakes due to supply chain constraints.

There is only one further condition required to be met for Carnarvon’s divestment to go ahead — approval from Australia’s Foreign Investment Review Board (FIRB) – which remains ongoing. CPC continues to work diligently with FIRB to obtain approval, noting that this process can take several months, Carnarvon said on Monday.

“The CPC transaction is on track to complete in this current quarter. All conditions other than FIRB approval have been satisfied, including importantly the approval of our partner Santos, for the divestment to proceed and CPC to join the joint venture,” commented Carnarvon chief executive Adrian Cook.

“We look forward to concluding the divestment this quarter and progressing the Dorado development and wider Bedout exploration in partnership with CPC and Santos.”

Santos itself is looking to divest some of its 80% operated equity in Dorado ahead of project sanction. Front-end engineering and design work for the oilfield’s floating production, storage and offloading vessel was performed by Altera Infrastructure and Singapore’s Sembcorp Marine (now Seatrium) while Malaysian contractor Sapura Energy undertook FEED for the Dorado wellhead platform.

CPC is no stranger to Australia’s oil and gas industry, having interests in Shell’s Prelude FLNG and the Inpex-operated Ichthys liquefied natural gas project. CPC has also received FIRB approval to acquire an interest in exploration permit WA-533-P from Inpex.