Asset A&D

Santos Signs LoI to Sell 12.5% Interest in the Barossa Project to JERA

By Shriya Bhargava
April 17, 2020
a minute read
Offshore Rig

Australian energy company Santos Ltd. has signed a Letter of Intent (LoI) with JERA Company Inc., a 50:50 joint venture between Japanese energy utilities TEPCO Fuel & Power Inc. and Chubu Electric Power Company Inc., to sell a 12.5% interest in the Barossa Project located in the Bonaparte Basin, offshore Australia. JERA currently owns a 6.1% interest in 3.7 million tonnes per annum Darwin LNG facility, and the signing of the LoI advances partner alignment between the Darwin LNG and Barossa joint ventures for the development of the Barossa field as backfill for Darwin LNG.

The deal with JERA follows Santos’ recent agreement with SK E&S Company Ltd., a subsidiary of the South Korean conglomerate SK Group, to sell a 25% interest in Darwin LNG. Previously, in October 2019, Santos had entered into an agreement with U.S. independent ConocoPhillips to acquire its entire northern Australian business, including its operated interests in Darwin LNG and the Bayu-Undan, Barossa and Poseidon fields located in the Timor Sea, for a total consideration of approximately US$1.4 billion. Following completion of the ConocoPhillips acquisition and the sell-downs to JERA and SK E&S, Santos will hold a 43.4% interest in Darwin LNG and a 50% interest in Barossa.

The sale of the 12.5% interest in Barossa to JERA remains subject to the negotiation and execution of a binding sale and purchase agreement, completion by Santos of the acquisition of ConocoPhillips’ northern Australian assets, third-party consents, regulatory approvals and a final investment decision on Barossa.

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