Woodside's $8 Billion Oil Search Bid Targets Lower Costs in PNG

Those expansion projects may be able to reduce their costs to about $2,000 for each ton of capacity, making them economically feasible despite low oil prices, according to Lu Wang, a Hong Kong-based analyst with Bloomberg Intelligence. Spending at Exxon’s PNG LNG development of about $2,750 a ton was lower than seven rival LNG projects in neighboring Australia, BI estimates.

“Our proposal will create the regional oil and gas champion for Papua New Guinea and Australia with a global portfolio of world class assets and development opportunities,” Woodside Chief Executive Officer Peter Coleman said in an e-mailed response to questions on Wednesday.

The price of the fuel shipped to northeast Asia has slipped more than 60 percent since climbing to a record $19.70 per million British thermal units in February 2014. Spot LNG cargoes for delivery to the region fell to $7.40 in the fifth straight week of declines.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Aaron Clark


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