Santos launches Dorado FEED program

Australian oil and gas firm Santos has launched the front-end engineering and design (FEED) phase of the Dorado project in the Bedout Sub-basin, offshore Western Australia.

Dorado is an integrated oil and gas project which is planned to be developed in two phases. Phase 1 development involves the production of oil and condensate through a wellhead platform (WHP) and floating production, storage and offloading facility (FPSO).

Santos said on Tuesday that Phase 1 has an estimated gross capital cost of approximately $2 billion, assuming a purchased FPSO.

The selected concept of an FPSO and WHP allows for the optimal integrated development of both the gas and liquids resource and retains sufficient flexibility to support future exploration success. Gas will be reinjected in the initial phase to enhance oil and condensate recovery.

Phase 2 will then develop the significant natural gas resources in the Bedout Sub-basin and provide future backfill supply to Santos’ current WA domestic gas infrastructure assets.

Dorado is expected to have an initial gross oil production rate of between 75,000 to 100,000 barrels per day of high-quality crude.

Santos managing director and chief executive officer Kevin Gallagher said: “Entering FEED for the Dorado project is a significant milestone and has the project on schedule for a final investment decision around mid-2022, building on the investment decision on the Barossa gas project earlier this year.

“Dorado is on track to be the first development in the Bedout Sub-basin, with its high-quality reservoirs and shallow-water setting, making it a very cost-competitive project globally.

“The project is also a very low CO2 reservoir with approximately 1.5 per cent CO2, and with all gas reinjected in the initial phase, making it one of the lowest emission intensity oil projects in the region.

“After the initial phase of liquids production, gas export from the development allows for a future source of supply into our domestic gas infrastructure in Western Australia.

“Potential nearby tie-in opportunities, starting with the Pavo and Apus prospects to be drilled early next year, could be easily tied back into the Dorado infrastructure and materially increase the value of the project, due to the very low cost of development”.

FEED contracts for the FPSO and WHP design are being finalised and are expected to be awarded over the next few months. This follows the competitive pre-FEED phase of the project where top-tier contractors have been engaged for these major work packages.

Santos has an 80 per cent interest in the Dorado project and is the operator. The remaining interest is held by Carnarvon Petroleum.

The company added that it was seeking interest from the market in non-operated equity in Dorado and potentially other WA oil assets.

In a separate announcement Carnarvon Managing Director and CEO, Adrian Cook, said: “The Dorado project is a world-class resource, and we are very pleased to commence FEED. This is an important step which has us on track to achieving a Final Investment Decision around mid-2022”.