BP To Buy All Crude Oil From Cliff Head Field

BP To Buy All Crude Oil From Cliff Head Field
BP has agreed to buy all crude oil produced from Triangle Energy-operated Cliff Head field offshore Australia.

Energy supermajor BP has entered into an agreement to buy all the crude oil produced from Triangle Energy-operated Cliff Head field offshore Australia.

The Cliff Head Field is owned by its namesake joint venture composed of Triangle Energy with a 78.75 percent stake and Pilot Energy with a 21.25 percent stake.

The JV said that they had entered into a binding offtake agreement with BP Singapore for the sale and purchase of crude oil produced at the Cliff Head oil field.

Under the terms of the offtake agreement, BP Singapore will buy 100 percent of the crude produced from the Cliff Head oil field, commingled with crude and condensate of other producers on FOB Kwinana terms. Triangle Energy will act as the operating agent and has agreed with each of the designated seller groups to govern the provision of these services.

This deal will operate in tandem with the already executed product storage and services agreement with BP Kwinana and is based on the terms of the non-binding offtake term sheet agreed to at that time.

The sellers have each entered into a storage agreement with BP Kwinana, which, operating together, leased tanks for storing the seller’s crude oil and condensate on a commingled basis.

The initial term of the offtake agreement is aligned with the term of the storage agreement. The offtake is for the entire production quantity from the Cliff Head oil field, and pricing is at a fixed discount to Brent. BP Singapore has been granted a right to match any offers for the sale of Cliff Head product sold on a standalone basis for a period of 3 years following the delivery period.

Based on current storage levels, the Cliff Head joint venture expects that the first lifting will take place in October 2021.

“This [agreement] provides certainty to the Cliff Head joint venture regarding upcoming oil production and continues the significant contribution to the West Australian community. The Cliff Head Oil Field, together with its significant infrastructure, is now capable of continuing to take oil to the market, as well as providing the base upon which further exploration and development success in the permit areas may be exploited,” Triangle Energy Managing Director Robert Towner said.

The Cliff Head oil field is located in the Perth Basin about 168 miles north of Perth and 7.5 miles off the coast of Dongara in Western Australia. Oil is produced via five electrical submersible pump production wells, with produced water reinjected into three injection wells at the offshore platform.

The platform is connected to the onshore Arrowsmith Stabilisation Plant by twin 19-mile production and injection pipelines. The crude oil is then trucked to BP at its Kwinana refinery south of Perth.

To contact the author, email bojan.lepic@rigzone.com


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