Santos Bids For Iran, Egypt Assets

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Santos Ltd. unveiled plans this week to boost its offshore activities by bidding for assets in Iran and Egypt.

Santos said in its annual report it was awaiting the outcomes of bids for an oil development opportunity in the Middle East and a "multiple exploration and development project onshore North Africa."

The oil project is in Iran, where Santos has been active since late last year in a joint venture with National Iranian Oil Company.

The second asset, regarded as more of an exploration opportunity, is in Egypt, he added.

"It is very early days but the bids are material opportunities for us," the spokesman said, adding that Santos should be able to give further details in the next few months.

Since Chief Executive John Ellice-Flint's arrival three years ago, Santos has sought to diversify outside of its core production hub in Australia's Cooper Basin.

The company has moved into Indonesia, where it is planning to develop the Oyong/Maleo gas fields offshore East Java.

Also, earlier this month it agreed to buy Novus Petroleum Ltd.'s Indonesian and Cooper Basin assets from investment company Sunov Petroleum. The US$192 million deal is conditional on Sunov succeeding in its A$1.77-a-share takeover bid for Novus.

Analysts say Santos' latest push offshore into the North Africa/Middle East region mirrors moves by its Australian competitor Woodside Petroleum Ltd.

The latter has a stake in the Ohanet gas project in Algeria, and is also developing oil fields offshore Mauritania.

In the annual report, Ellice-Flint said Santos hopes to approve three projects over the next few months: the John Brookes gas field offshore Western Australia state, the Casino gas field offshore Victoria state, and the Oyong/Maleo gas fields.

"To deliver growth in the future, Santos plans to invest A$784 million on all activities in 2004," he said in the report. That includes A$134 million on wildcat exploration, A$82 million on delineation and appraisal, A$490 million on development activities and A$78 million on construction and fixed assets.

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