The $440 million project is the first offshore oil development to be operated by Santos since the Company’s formation in 1954.
First production has been achieved only three years from the drilling of the Norfolk -1 well which confirmed the commerciality of the Mutineer-Exeter fields and just 17 months from development approval.
The project has been delivered three months ahead of schedule and about 10% under budget. The initial budget for the development was $480 million and the final cost about $440 million.
Production will be from four horizontal development wells, with the production rate expected to be 70,000 to 90,000 barrels of oil per day during the start-up phase.
“Yesterday’s Mutineer-Exeter start-up represents a significant addition to Australia’s oil production,” said Santos managing director John Ellice-Flint.
“It is an important project for Santos as it will be a fundamental contributor to the company’s near-term growth – with a payback period of less than two years. We have achieved a fast-track development, premised on an appropriate concept which has maximised the value of the oil in the ground.
“The early production and lower costs have been achieved through the total support and commitment of our employees, suppliers and contractors.”
The floating production storage and offtake vessel – the MODEC Venture 11 – is a converted double hull trading tanker with a disconnectable turret mooring system. It has provision for 930,000 barrels of processed crude oil storage with a design throughput of 100,000 barrels of oil per day.
The MODEC Venture 11, including the fixed mooring system, is leased by the joint venturers and was contracted under a services agreement which covers the supply of the vessel, maintenance, production operations, demobilisation and abandonment at the end of the field life.
Mutineer-Exeter crude is very high quality and the first cargo of oil from the field has been sold under a marketing agreement with BP at a premium to the Tapis benchmark.
Interests in the Mutineer-Exeter project (WA-26-L and WA-27-L) are Santos Ltd (operator) 33.4%, KUFPEC 33.4%, NipponOil 25% and Woodside Petroleum Ltd 8.2%.
