Woodside Says Browse Lease Renewals Accepted

SYDNEY (Dow Jones), Dec. 28, 2009

Woodside Petroleum said Thursday that the Browse joint venture partners have agreed to the terms and conditions offered by the federal and Western Australian state governments over their gas reserve retention leases.

Woodside, however, did not say whether its partners in the venture -- Chevron Corp., BHP Billiton Ltd., BP PLC and Royal Dutch Shell PLC. -- support its plan to build a new liquefied natural gas plant at James Price Point in the Kimberly region of Western Australia state.

"Shell is committed to developing the Browse gas resources and can confirm that it has accepted the renewal conditions for the Browse Joint Venture retention leases," Shell said in a statement.

The company will focus on working with the other participants to determine the best development concept to pursue, given the conditions on lease renewals, it said.

Spokespeople for the other JV partners either declined to comment or weren't immediately available to comment.

In an effort to speed up the commercialization of the Browse gas, the federal and state government on Dec. 2 said the partners will lose their retention leases if they don't choose where to process their gas within 120 days.

The partners must also spend A$1.25 billion on work toward making a final investment decision on an LNG development by 2012, which is broadly in line with Woodside's investment decision target for the Kimberly project of 2011.

Woodside's partners were also considering piping the gas to the North West Shelf LNG project at Karratha when it runs out of feed stock, but at a much later date.

The Browse partners were given 30 days to decide whether to agree with the governments' terms and conditions.

Their decision to agree is a slight positive for Woodside as it shows its plans are on track, with no messy legal challenges launched to dispute the government conditions.

The partners, however, still have plenty of time to disagree with Woodside, or exit the joint venture altogether.

A Woodside spokeswoman declined to comment on the progress of the JV discussions, other than to confirm they've agreed to the governments' conditions.

Copyright (c) 2009 Dow Jones & Company, Inc.

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