By STEPHEN BELL
PERTH -- Apache will push ahead with a big build up in its
Australia gas and oil operations over the next three years,
with this involving heavy spending in Western Australia in 2013
and 2014, coinciding with the United States company's decision
to sell $4 billion of its assets to shore up its balance
Its expansion plans come at a time when
Australia's natural gas sector is struggling with cost overruns
and facing the threat of LNG exports from shale gas rich North
America targeted at core Asian markets, as well as potential
competition from recently discovered and massive offshore East
The company will spend a record $1.9 billion in Western
Australia state where its Australian operations are sited this
calendar year, and a similar or slightly increased amount next
year as it rolls out new projects, Apache's new Australian
Next year's spending would likely be between $1.8 billion
and $2.1 billion, although final amounts hadn't been decided,
Faron Thibodeaux, Australian MD of Apache, told The Wall
In July, Apache inked an agreement to sell shallow water
operations in the Gulf of Mexico for $3.75 billion. Alongside a
long established domestic gas infrastructure in Western
Australia, Apache is a minority partner in Chevron $29 billion
Wheatstone gas export project.
Last month Apache unveiled its Bianchi gas discovery off
Western Australia and said it is assessing potential commercial
opportunities for the find, along with the nearby Zola field,
where it struck gas in 2011.
Mr. Thibodeaux said that Wheatstone is one development
opportunity being looked at for Bianchi and Zola, alongside the
company's domestic gas facilities. We have the luxury of
having options, he said, adding it is too early to estimate the
size of the Bianchi reserves. "Where it ends up will purely be
what makes the most commercial sense, as well as being able to
deliver into either one of those two markets, said Mr.
Thibodeaux, who took over from Tom Maher as head of Australia"
operations in January.
Both Bianchi and Zola are in Retention Lease WA-49-R, where
Apache is operator and majority owner, and has Santos, OMV
Australia, JX Nippon and Tap Oil as partners.
The permit lies relatively close to a trunkline being built
to connect onshore gas fields to the first stage of
Wheatstone's land based processing facility, which is due to
ship its first LNG in late 2016.
Apache is also a partner in the BHP Billiton operated
Macedon project, due to produce first gas
late in the Q3, and operator of two new oil projects, Balnaves
and Coniston, due for completion in 2014.
First oil from the $438 million Balnaves venture should be
delivered by the start of the Q2 next year, Mr. Thibodeaux
The $526 million Coniston development, meanwhile, is
expected to start up in mid 2014 after the company refurbishes
the Ningaloo Vision floating production storage and offloading
vessel to handle production from the field, he added.
The two projects forecast to produce more
than 50,000 bpd in total remain on budget and schedule, despite
cost pressures in Western Australia, Mr. Thibodeaux said. "They
are doing very well but it doesn't come easy," he said.
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