Woodside defers plans for offshore blocks after poor results, say sources

Australian energy company Woodside Petroleum and its partners have deferred gas exploration plans at two blocks off Rakhine State until next year after disappointing drilling results, industry sources have told Reuters.

The drilling in blocks A-6 and AD-7 had not found as much gas as hoped, Reuters reported on October 16, quoting four people familiar with the situation.

“They drilled (in A-6)… and found the gas but had to stop now because the company needs to evaluate commercial viability of the project… The results from two wells are not sufficient to decode whether the project is commercially viable or not,” a government official told Reuters.

Woodside “didn’t find the gas” it had expected in AD-7 and had decided to re-appraise the situation and decide on further action next year, the official said.

The company said drilling was completed, but declined to say if it had cancelled a tender for seismic exploration work. Reuters said the tender was cancelled early this month.

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Woodside had said in August both blocks could hold “multi-trillion cubic feet” of gas. Woodside’s chief executive, Mr Peter Coleman, said at the time that the company expected to know by the end of August if A-6 would be commercial.

Reuters quoted a source involved in bidding for the seismic exploration as saying Woodside had sent a letter in early October cancelling the tender as it had not received joint venture approval and was deferring the work to the second or third quarter in 2018.

Woodside subsidiary, Woodside Energy (Myanmar), and France’s Total, through Total E&P Myanmar, each have a 40 percent share in A-6, with the balance held by domestic firm, MPRL E&P.

Total did not respond to requests for comment, Reuters said.

Woodside has a 40 percent share in AD-7, with the balance held by its joint venture partner, South Korea’s Posco Daewoo Corp. Posco Daewoo told Reuters there had been no change in plans for the block.

Woodside is due to give a quarterly update on October 19.

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