MEO Australia is withdrawing from the Blackwood discovery and transferring it to Eni Australia, who will now own 100% stake.
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Blackwood, Heron map. From MEO. |
Blackwood is located in NT/P68, in the Timor Sea, off northern Australia.
MEO made this decision after assessing that the Blackwood area 2C contingent resource is below the threshold size required to support development of the Tassie Shoal Methanol Project (TSMP). The Australian company will now focus its technical efforts on the Heron area.
TSMP produces methanol from high CO2 feedstock gas to avoid the need for expensive separation transportation and geosequestration costs in alternative LNG or domestic sales gas development scenarios.
“We have assessed that the Blackwood field is too small to underpin development of the Tassie Shoal Methanol Project and that the value of the resource to MEO is insufficient to warrant incurring further costs,” says Peter Stickland, MEO MD and CEO. “Consequently, we are exercising commercial discipline by withdrawing from Blackwood and focusing our efforts on the Heron gas discovery.”
According to the terms of agreement, Eni will take responsibility for, and bear all costs involved in the process of managing the future division of the permit to facilitate separate ownership of the Blackwood and Heron resources. The entire permit will revert to MEO, should regulatory approval to divide the permit on acceptable terms to Eni is not reached.
In October, Eni relinquished its stake in the Heron area after opting out of plans to drill a second well inside permit area NT/P68. At the time, the Italian giant also elected to hold its current 50% interest in the Blackwood area without exercising the option to increase its stake by 25%.
In October 2013, the ENSCO 104 jackup spudded the Blackwood-2 appraisal well, however it was plugged and abandoned in January 2014. MEO Australia said in a December 2013 progress update that gas testing and reservoir productivity could not be conclusively established.
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