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Woodside confident of Tiof field prospects

Financial Times: Woodside confident of Tiof field prospects

By Virginia Marsh in Sydney

Published: August 19 2004

Woodside, the Australian oil and gas producer, yesterday held out the prospect of bringing forward development of its Tiof discovery in Mauritania, saying it expected the field to be at least as big as Chinguetti, its other large project in the African country.

Don Voelte, the group’s chief executive, said while Tiof was still being assessed it was sure to be developed and a four-well appraisal programme was under way.

If successful, the field, discovered last year, could become Woodside’s second source of production by 2008.

Analysts estimate it holds reserves of between 100m and 700m barrels of oil equivalent, with development costs of up to A$2bn (US$1.4bn).

Woodside, which has a 48 per cent stake in Tiof, has already given the go-ahead for the development of the US$600m Chinguetti field, another offshore development.

Mr Voelte said the situation there appeared to have stabilised following an apparent coup attempt last week.

The possibility of accelerating production in Mauritania comes as oil groups around the world are ramping up production in the face of record oil prices.

Mr Voelte, a former Mobil executive, offered little hope oil prices would fall in the near term, saying he did not expect the factors that had caused them to rise to disappear in six to eight months.

Woodside’s production dipped nearly 9 per cent to 28m boe in the first half but the group, in which Royal Dutch/Shell has a 34 per cent stake, hopes to achieve 58m boe in the second half.

The group, which aims to lift its production to 100m boe by 2007, also said it was looking to develop the Browse field, as a third liquefied natural gas hub in Australia, on top of the North West Shelf, its existing LNG operation, and Greater Sunrise, a project off Darwin in the Timor Gap.

“We’ve talked to the Chinese and we’re talking to other countries about it and . . . it’s very favourably received in the marketplace,” Mr Voelte said.

First-half profits rose 29 per cent to A$351m, excluding a one-off gain of A$374m from the sale of a 40 per cent stake in the Enfield project to Mitsui of Japan. Sales fell 11 per cent to A$994m. The shares closed down 28 cents at A$18.37.

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