Project Status


2002 Updates | 2001 Updates | 2000 Updates | 1999 Updates


Bayu-Undan Gas Recycle Project Development Plan Approved

By Timor Gap Joint Authority

PERTH, WA, 28 February, 2000 --- Phillips Petroleum Company [NYSE: P], through a subsidiary, and its co-venturers are pleased to announce that the development plan for the Bayu-Undan gas recycle project has been approved by the Joint Authority for the Timor Gap Zone of Cooperation. The project participants approved the gas recycle phase of development in late 1999 and, with receipt of this final government approval, engineering, procurement and construction activities on this phase of project development will proceed. Phillips is the unit operator for the Bayu-Undan project.

Bayu-Undan is a world-class gas and gas condensate field that has been fully appraised and contains estimated recoverable reserves of 400 million barrels of condensate and liquefied petroleum gas (LPG) and 3.4 trillion cubic feet of natural gas. The field straddles production sharing contract areas 91-12 and 91-13 in Area A of the Timor Gap Zone of Cooperation (ZOCA) between East Timor and Australia. The field is located in 80 meters of water about 500 kilometres northwest of Darwin, Australia, and 250 kilometres south of Suai, East Timor.

The US$1.4 billion gas recycle project will involve production and processing of wet gas, separation and storage of condensate, propane and butane, and re-injection of dry natural gas back into the reservoir. First liquids production is scheduled in late 2003 and full commercial production in early 2004.

The milestone decision by the Timor Gap Joint Authority to approve development of the gas recycle project was facilitated by an exchange of diplomatic notes between the United Nations Transitional Administration in East Timor (UNTAET), on behalf of East Timor, and the Commonwealth of Australia. This agreement provides for the continuation of the legal, fiscal and administrative regime of the Timor Gap Treaty. As the first major development of gas resources within ZOCA, Bayu-Undan should contribute significantly to economic stability and development in East Timor and throughout the region. It also confirms the commercial success of a major new gas province in the central Timor Sea.

The project participants are continuing to progress gas commercialization opportunities for Bayu-Undan. Approval of the Bayu-Undan gas recycle project will facilitate ongoing gas marketing efforts that are targeting a wide range of domestic and regional natural gas markets. Project participants expect to proceed with this second phase of development once sufficient foundation markets have been secured. A Bayu-Undan gas utilization project will be subject to separate approvals by the co-venturers and the Timor Gap Joint Authority.

The Bayu-Undan project co-venturers and their initial participating interest include Phillips (50.3 percent), Santos (11.8 percent), Inpex (11.7 percent), Kerr-McGee Corp. (11.2 percent), Petroz (8.3 percent) and British-Borneo (6.7 percent).

Phillips is an integrated petroleum company engaged in oil and gas exploration and production worldwide; refining, marketing and transportation operations primarily in the United States; chemicals and plastics manufacturing and sales worldwide; and technology development and licensing. Founded in Bartlesville, Oklahoma, in 1917, the company had 15,900 employees and US$15 billion of assets at the end of 1999, and US$14 billion of revenues for the year.

New Alliance for Bayu-Undan Gas

Natural gas reserves constitute approximately 60 percent of the Bayu-Undan resource. The second phase of the Bayu-Undan could involve a gas export development project. The decision to progress that phase of development is separate from the current gas recycle project and will be dependent upon securing a gas market sufficient to support co-venturer approval of a commercial development. As operator of the field, Phillips would be responsible for development of an offshore pipeline to export gas to Darwin. The Unit Participants in the project have made significant progress in identifying near-term gas markets in the Northern Territory.

In November 1999 Phillips and Epic Energy entered into an alliance to conduct market development activities to commercialize gas from the Timor Sea throughout Australia. The alliance will see Phillips and Epic Energy work together over the next 12 months to optimise the development plans for onshore pipelines from Darwin, and firm up potential markets in the Northern Territory, Queensland and the southeastern states. This alliance builds on the recent announcement that the liquids recovery / gas recycle phase of the Bayu-Undan project has been approved by its co-venture group.

Epic Energy, Australia’s largest natural gas transmission company with pipeline assets in three states, has undertaken a preliminary feasibility study for associated onshore pipeline systems connecting Darwin with markets in the eastern states of Australia. The company will now conduct further engineering and market development activities.

Tender Issues

The project has recently issued the following ITT’s :

Contract NoContract TitleDate Issued
C0010Completion Works (HUC)25/01/00
C0014CUQ Deck Fabrication10/12/99
C0016CUQ & DPP Jacket Fabrication17/01/00
C0017Wellhead platform Fabrication17/01/00
C0021Corporate Travel11/11/99
C0022DPP Deck Fabrication10/12/99
C0024Installation of WHP, Jackets and Bridges24/01/00
C0034Dynamic Simulation Services19/01/00

New Contract Awarded

A Letter of Intent (LOI) has been issued to the Clough-Aker Joint Venture for the Float Over Installation of the Integrated Topside Decks for the Bayu Undan Gas Recycle Project. This includes the 10,627 tonne Drilling, Production and Processing topside and the 10,570 tonne Compression, Utility and Quarters topside.

Developments in East Timor Council adopted Resolution 1272 (1999) under Chapter VII of the United Nations Charter. As of that date, during East Timor’s transition to independence, The United Nations Transitional Administration in East Timor (UNTAET) has the sole authority over the territory of East Timor, including its maritime zones. These zones compromise the Zone of Cooperation (ZOC) defined in the Timor Gap Treaty where jurisdiction is shared with Australia. On 10 February 2000, representatives from UNTAET on behalf of East Timor and the Commonwealth of Australia executed documents relating to the Timor Gap Treaty. These documents maintain the current legal, fiscal and administrative arrangements in the Timor Gap Zone of Cooperation.

Please use the hyperlink provided to view the joint statement from Minister For Foreign Affairs - Alexander Downer
and Minister For Industry, Science And Resources - Nick Minchin on the signing of the Timor Gap Treaty.

Detail Engineering Design Status

Currently the Detail Engineering Design is 15% completed. TIGA Joint Venture (the Engineering and Procurement Contractors) have been mobilising in Perth for the past few months, presently they have manned up to 255 personnel which is 78% of the total anticipated manning levels.




The contents of this website contain forward-looking statements made by, or on behalf of, Phillips and the other Unit Participants. Neither Phillips nor the other Unit Participants undertake to update or revise any of these forward-looking statements. These include, without limitation, statements relating to operations, plans, strategies, objectives, expectations and limitations. These statements are not guarantees of future performance or result. Rather, due to risks, uncertainties and other factors, actual results may differ materially from those expressed in any such forward-looking statement. The following are certain (but not necessarily all) important risk factors that could cause actual results to so differ:

Plans to drill wells and develop Bayu-Undan are subject to: the ability to obtain agreements or consents between or from co-venturers and governmental authorities; engaging drilling, construction and other contractors; geological, land or sea conditions; world prices for oil, natural gas and natural gas liquids; applicable law and regulatory requirements; and the availability of economical financing.

Estimates of proved reserves, raw natural gas supplies, and project cost estimates have been developed using the latest available information and data, and recognized techniques of estimating, including those prescribed by the U.S. Securities and Exchange Commission, generally accepted accounting principles and other applicable requirements.

Please note that all references to Phillips or Phillips Petroleum on this page refer to Phillips Petroleum (91-12) Pty Ltd as Unit Operator for the Bayu-Undan development, except as specifically mentioned otherwise.

Copyright 2001 Phillips Petroleum (91-12) Pty Ltd. All rights reserved.
Updated 08/06/04