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Santos, as operator of the Bayu-Undan Joint Venture, today announced that production from the Phase 3C infill drilling program at the Bayu-Undan field had begun with the first well producing a better than anticipated outcome.

The first well has been brought online at 178 million standard cubic feet per day (mmscfd) of gas and 11,350 barrels per day (bbl/d) of liquids, significantly increasing liquids production to over 25,000 bbl/d from the field and increasing offshore well capacity for supply of gas to the Darwin LNG plant.

The Noble Tom Prosser jack-up rig has now commenced drilling the second of the three wells, with the program expected to be completed early next year and will maximise value from the Bayu-Undan field.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said: “We are delighted to see first production from the 3C program, which is immediately delivering value to both the Bayu-Undan Joint Venture and the people of Timor-Leste and importantly helps extend the life of Bayu-Undan and the jobs and investment that rely on it.

“Following the successful result from the first of the Van Gogh Phase 2 infill wells, today’s results are another example of Santos creating incremental value from acquired assets.

“We’ve seen a better than expected reservoir outcome with this first well of the campaign, with successful results across both the primary and secondary targets in the well and a much higher initial gas production rate than expected.”

“It has not come without its challenges, managing crew movements with COVID-19 outbreaks either side of the Timor Sea, so I want to acknowledge the efforts of our team, our Joint Venture partners and specifically the Timor-Leste regulator, Autoridade Nacional do Petróleo e Minerais (ANPM), in keeping this exciting program on track.”

The successful drilling and tie-in of the first of three new wells comes six months after a Final Investment Decision and has lifted natural gas and liquids production for the field in Timor-Leste offshore waters.

ANPM President Florentino Soares Ferreira said: “From the outset, the Phase 3C program has been seen as an opportunity to maximise the ultimate recovery in the Bayu-Undan field. This was of course a calculated decision from the regulatory side considering we are working under the Production Sharing Agreement regime in which the cost recovery scheme is a fundamental element in our assessment.

“Managing the mobilisation of the crews between Bayu-Undan and hotspot areas during the pandemic has been a challenging task, but with great synergy between the Operator and ANPM, the Phase 3C operation has been smooth.

“The successful result of the first 3C well has proven to us that our decision for approval was correct. We can now give additional hope to Timor-Leste with the increase of production and extension of the Bayu-Undan field life, and we look forward to the success of the two remaining 3C wells.”

Santos has a 43.4% operated interest in Bayu-Undan. The remaining interest is held by SK E&S (25%), INPEX (11.4%), Eni (11%), JERA (6.1%), and Tokyo Gas (3.1%).