BMG to upgrade Bass Strait Basker Manta Gummy production facilities
High oil prices have influenced the decision by the Basker/Manta/Gummy (BMG) oil and gas joint venture in Bass Strait to bring forward a $1.23 billion investment in upgrading its production facilities.
Another $US 400 million ($418 million) will be invested by BW Offshore on a purpose-built floating production, storage and offload facility (FPSO) that the BMG joint venture will lease initially for five years, with an option for a total of 15 years.
The BMG project now involves the use of a mini-FPSO and a separate shuttle tanker. The new FPSO will have the capacity to handle more oil, gas and water than the present set-up.
But even with the bigger facility, the expected capacity rate of the project's new oil production of 20,000 barrels a day will be well short of initial expectations from the innovative mini-FPSO and shuttle tanker set-up.
But this does not matter, given that oil prices are more than double the level that the original project would have been based on.
Beach Petroleum is a 30 per cent partner in the project, having sold 20 per cent of its original stake to reduce its exposure and to capitalise on valuations for oil assets in the high price environment.
Beach's managing director, Reg Nelson, said yesterday that the commitment to the expanded project was great news.
"The new FPSO will allow us to increase oil production and also give us the chance to look much more closely at developing the natural gas part of the project," he said.
"It also allows us to seriously look at the upside to the project through the potential development of additional resources to the north of the existing production in the Manta and Chimaera fields," Mr Nelson said.
He said a vessel had been identified and it was expected to take about 18 months to complete its conversion for use in Bass Strait.
Anzon Australia is the 40 per cent partner and operator. Sojitz Energy holds 10 per cent and CIECO holds the rest.
