Woodside had been considering exercising a pre-emptive right to acquire BHP Billiton's stake in the Laminaria and Corallina oil fields, which BHP agreed to sell to Paladin.

But Woodside decided it was satisfied with its existing stake, a spokesman told Bloomberg yesterday.

Shell has also decided not to pre-empt the sale of BHP Billiton's stake in the fields to Paladin, a Perth-based spokesman told Bloomberg.

Last November, BHP Billiton announced its intention to sell its 32.61% stake in Laminaria and 25% in Corallina to Paladin, which normally sticks to the North Sea region.

The deal also includes the purpose-built Northern Endeavour floating production, storage and offloading vessel. The two fields are about 550km from west-north-west of Darwin in water depths of between 350 and 400 metres.

The Laminaria and neighbouring Corallina oil fields were discovered in 1994 and 1995 respectively. Production peaked at 180,000 bopd in 2000, but the fields have since been in natural decline and have been averaging 30,900 bopd for 2004.

The purchase price is effective as at 1 July 2004, and is subject to adjustments for working capital and cash flow movements between 1 July 2004 and completion.

BHP Billiton said the sale of its interests in the Laminaria and Corallina oil fields was part of the company's active portfolio management strategy. Following a review, its interests in the fields were identified as being non-core to the corporation's future petroleum strategy.

The acquisition is one of Paladin's largest to date. Paladin currently has assets in the North Sea in the UK, Denmark and Norway, as well as in Gabon, Indonesia, Romania and Tunisia.

"This is of an ideal size as a first deal for Paladin in Australia," said Paladin chief executive Roy Franklin.

"There is plenty of scope for added value through further investment in both Laminaria and Corallina. In addition we see the opportunity for follow-on deals in the country."

The deal would add about 13 million barrels 10% to Paladin's reserves base and increase its production by between 12 per cent and 15 per cent, according to Franklin.

Paladin will initially run its Australian operations from London but intends to set up an office in Perth within the next six months. Franklin said he was not ruling out further acquisitions in Australia.