US Gulf, Libya Loom Large for Woodside

PERTH, Apr 12, 2005 (Dow Jones Commodities News Select via Comtex) By Stephen Bell Of DOW JONES NEWSWIRESHaving recently boosted its U.S. presence, Australia's Woodside Petroleum Ltd. (WPL.AU) believes that the Gulf Of Mexico will soon become its second major offshore business unit.

"I'd like to think that the Gulf of Mexico would represent something like 15-20% of our production in four or five years time," said Agu Kantsler, Woodside's director of exploration and new ventures.

The aim is to make the GOM a "substantial plank in the Woodside portfolio," Kantsler told Dow Jones Newswires in an interview on the sidelines at the Australian Petroleum Production & Exploration Association conference.

Operator of the giant North West Shelf gas venture offshore Western Australia, Woodside is expanding overseas. It aims to produce around 100 million barrels of oil equivalent (mmboe) per year by the end of the decade, up from 56 mmboe currently.

Its main overseas venture is the US$625 million Chinguetti project offshore Mauritania that is due to begin production early next year.

However, Woodside signaled in January that it is also serious about growing its Gulf of Mexico business when it agreed to an alliance with U.S.-based Explore Enterprises.

Explore will use its local knowledge to identify opportunities for Woodside in the Gulf of Mexico, regarded as one of the more competitive environments for oil explorers.

Kantsler said that the Explore team is hiring new personnel and looking at a "number of opportunities" in Woodside's existing portfolio.

Libya Acreage Also Has Potential

Woodside's Midway gas joint venture with Pioneer Natural Resources (PXD) is due to come on stream in a "matter of months", Kantsler said, while the BHP Billiton (BHP)-operated Neptune oil field is due to be approved for development by midyear.

Woodside has 20% of Neptune. Broker Goldman Sachs JBWere said in a recent note that the field could contain 250 mmboe and cost around US$1 billion to develop.

Kantsler said that "typically those sort of fields (like Neptune) come on at 40-50,000 barrels a day" of oil, along with associated gas.

Turning to other overseas projects, Kantsler said that Woodside plans for up to six exploration wells in Mauritania in the second half of the year.

Woodside and its partners including Hardman Resources Ltd. (HDR.AU) are hoping for more success than last year's program that returned three dry holes along with the Tevet discovery.

But Kantsler cautioned that exploration off the coast of the West African nation is "not straight forward".

"I wouldn't like the market to assume that this is all easy", he said, adding that success in the new Mauritania program is "not to be taken for granted".

Investors need to be "realistic that this is exploration - there are no guarantees", he said.

Elsewhere, Woodside hopes to drill two onshore exploration wells in Libya later this year.

One will target oil and gas in the Murzuk region in southwest Libya, while the other will track an oil target in the Sirte Basin in the north of the country.

"We are very hopeful for our Libya position," he said, adding that there is a "contest" to see whether Libya or the Gulf of Mexico becomes Woodside's third-ranked exploration province after Australia and Mauritania.

"You'd have to think that the Gulf of Mexico right now is slightly ahead, simply because we have a couple of discoveries in there already," he said.

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