The project, which was designed to accelerate production and access incremental reserves from the Laminaria and Corallina oil fields, involved the drilling of two new wells - Laminaria 7 and 8 - with subsea completions and tie-ins to the 'Northern Endeavour' floating production, storage and offloading facility.

Woodside said initial production from Phase 2 during the clean-up of the Laminaria-8 well was about 50,000 barrels of oil a day (bopd) while the Laminaria-7 well flowed at a clean-up rate of about 20,000 bopd.

Daily production from the Laminaria and Corallina fields immediately before starting the hook up of the two wells was about 73,000 bopd.

Woodside previously advised the market that drilling difficulties made it necessary to re-design the Phase 2 wells as vertical rather than horizontal producers and as a result, ultimate oil recovery from Phase 2 is likely to be lower than previously planned.

Production in 2002 from the Laminaria field will be highly dependent on the rate of decline of the Phase 1 and Phase 2 wells, Woodside said in a statement.

Equity interests in production licence AC/L5 and Corallina oil fields are Woodside Energy 50%, BHP Billiton (North West Shelf) 25%, and Shell Development (Australia) 25% while equity interests in the Laminaria oil field are Woodside 44.925%, BHPB 32.6125% and Shell 22.4625%.

The estimated final capital cost of the Phase 2 project is expected to be $127.5 million.