Santos Advances Barossa Gas Project with Drilling Nod, Pipeline Fate Entangled in Legal Dispute
(Reuters) — Australian oil and gas major Santos said on Monday it had received approval for a revised drilling plan at its $4.3 billion Barossa gas project, although the fate of a pipeline to take gas to shore remains locked in a legal dispute.
Santos was forced to stop drilling at the field roughly 285 km off northern Australia in September 2022 after the Federal Court ruled it had failed to sufficiently consult Indigenous people on the nearby Tiwi Islands.
Following further consultation, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) accepted the updated drilling proposal on Friday, Santos said in a statement on Monday.
Santos did not immediately respond to a request for comment on when it might resume drilling.
While there is a 30-day window to appeal the decision, it is likely the offshore regulator heavily scrutinized the proposal to reduce the risk of a legal challenge, Citi analysts said in a note.
Positive news for the major expansion project at Santos comes just over a week after the company revealed preliminary talks with its bigger rival Woodside Energy over a potential A$80 billion merger.
Separately, Santos is awaiting a ruling on whether it can resume work on a key section of pipeline that will take gas to Darwin for processing.
A court in November ordered work on part of the pipeline stopped until mid-January after a traditional land owner from the Tiwi Islands called for a halt to pipeline work until its impact on underwater cultural heritage is clear.
Despite the various challenges, Santos affirmed last month it still expects to start producing Barossa gas in the first half of 2025.
However, a decision against Santos in January could set the project back over a year, Citi analysts said.
Santos on Monday also announced a feasibility study with JX Nippon Oil & Gas Exploration Corporation and ENEOS Corporation for a project to ship carbon dioxide from Japan to Santos' carbon capture and storage facility at Moomba.
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