Key regulatory approval in place for Dorado oil project development and sanctioning

Australian energy giant Santos has received acceptance from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) of the Offshore Project Proposal (OPP) relating to its operated Dorado oil project offshore Australia.

When Santos disclosed in August 2022 that the inflationary cost environment and supply chain uncertainty did not support the final investment decision (FID) of its Dorado offshore project in 2022, even though it was previously targeted for mid-2022, the Offshore Project Proposal (OPP) for Dorado, submitted in September 2020, was still under assessment with the Australian regulator.

At the time, the operator was in contact with NOPSEMA to gain acceptance of the OPP, which was described as a key regulatory approval required for the JV to progress subsequent approvals and sanction the Dorado development.

Following the grant of a production license in April 2022, Dorado now has the primary regulatory approvals required to support development, according to Santos and its partner Carnarvon Energy, which confirmed NOPSEMA’s acceptance of the OPP on Tuesday, 14 February 2023.

Carnarvon Energy describes the acceptance of the OPP as an important progression in the regulatory approval process to support the sanctioning of the Dorado development. This OPP covers approval to undertake the Dorado Phase 1 liquids development – including the reinjection of gas to enhance resource recovery – and the tie-back of future resources within the project area covered by the OPP to augment Dorado production.

Adrian Cook, Carnarvon Managing Director and CEO, commented: “Following grant of a production license in April 2022, the Joint Venture has progressed further important regulatory approvals necessary to support sanctioning of the Dorado development. Critically, the scope of the OPP will allow for the tie-back of recent discoveries like Pavo, creating the potential for significant upside where other petroleum resources in exploration permits WA-437-P and WA-438-P are produced using the Dorado facilities.”

As previously reported, the Santos-operated Pavo-1 well, located in exploration permit WA-438-P, was drilled in 2022, using the Noble Tom Prosser jack-up rig. The well proved to be “a significant oil discovery”, located 46 kilometres east of the Dorado field and provides an option for a low-cost tie-back to the first phase of the Dorado development.

Kevin Gallagher, Santos Managing Director and Chief Executive Officer, claims that Dorado is an exciting development opportunity which is further enhanced by the recent discovery at the adjacent Pavo field, adding: “Our focus now is to finalise the concept for an integrated liquids and gas development and obtain the remaining approvals required to support a final investment decision.

“Dorado will provide a welcome boost to Australia’s energy security, while the potential subsequent gas development provides a future source of supply for Western Australia’s domestic market and LNG projects. The best emergency reserve you can have for national liquid fuel security is oil in the ground and the infrastructure in place to produce it when you need it most.”

Based on Santos’ statement, the Dorado and Pavo fields are estimated to contain gross 2C contingent resources of 189 million barrels of liquids and 401 petajoules of gas. Santos’ share is 147 million barrels and 320 petajoules, respectively. The Australian giant has an 80 per cent interest in Dorado and a 70 per cent interest in Pavo, while Carnarvon Energy holds the remaining interests in these fields.

Furthermore, Dorado is a proposed phased liquids and gas development, with an initial phase of liquids development with gas re-injection and the potential for a second phase of development to recover and pipe the gas to the Western Australian domestic and LNG markets. It is located in the Bedout Basin, offshore Western Australia.

The project is planned to be developed in two phases with the first phase involving the production of oil and condensate through a wellhead platform (WHP) to an FPSO. Singapore’s Sembcorp Marine is in charge of the FEED process for the FPSO following a contract award from Altera Infrastructure in September 2021.

Moreover, the initial development incorporates ten wells being drilled into the four reservoirs – Caley, Baxter, Crespin and Milne – and the hydrocarbons being produced via a 16-slot WHP to the FPSO, which has a design capacity to process 100,000 barrels of oil per day, along with 215 million scf/day of gas injection and storage for around 1 million barrels of oil & condensate.

“With market volatility continuing in global energy markets, developments like Dorado are critical to ensuring forecast energy demand in the Asian region is met, and will play an important role in Australia’s long-term energy security,” concluded Cook.