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Hess in Talks With Chevron, Woodside, Shell on Gas

BLOOMBERG

By Ben Sharples

Jan. 28 (Bloomberg) — Hess Corp., the fifth-biggest U.S. oil company, is in talks with Chevron Corp., Woodside Petroleum Ltd. and Royal Dutch Shell Plc to convert gas from its fields in Western Australia to liquid for export.

Hess executives are in discussions with the three companies “about liquefaction options and anticipate being in those discussions for the majority of 2010,” Gregory Hill, president of worldwide exploration and production, said during a conference call with analysts and investors yesterday.

Woodside, building the A$13 billion ($11.6 billion) Pluto liquefied natural gas project in Western Australia, is seeking reserves held by rival companies to help expand the venture. The Perth-based company is competing with Chevron’s neighboring Wheatstone venture for additional fuel.

New York-based Hess will drill five wells in a wholly owned permit during the first half of the year and is planning further wells to appraise the field, Hill said. The resource lies to the southwest of the Gorgon and Jansz gas fields, which hold 40 trillion cubic feet of the fuel and which Chevron aims to develop for LNG exports.

Woodside has started Australia’s largest exploration drilling campaign to find alternative supplies for Pluto after Apache Corp. and Kuwait Foreign Petroleum Exploration Co. ended negotiations to sell gas to the project in October, opting to feed Chevron’s Wheatstone venture instead.

Woodside said Jan. 25 gas was discovered in the Noblige-1 well, half-owned by Hess. Eight wells are planned this year for the area where the find was made, Hill said.

Roger Martin, a Perth-based spokesman for Woodside, said the company was in confidential talks with a number of parties. Guy Houston, spokesman for Chevron, and Claire Wilkinson, a spokeswoman for Shell’s Australian unit, declined to comment.

To contact the reporter on this story: Ben Sharples in Melbourne at [email protected]

Last Updated: January 28, 2010 00:22 EST

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