The Canadian group intended to build a $2 billion, 4 million tonnes-a-year facility to satisfy growing Asian demand for Methanol. However, the strengthening Aussie dollar caused a blow out in capital costs.
Of the six projects slated for the Burrup, only the Indian-backed Burrup Fertilisers has been confirmed. Two have already fallen by the wayside (Methanex and Syntroleum), while the other three (Liquigaz, Dampier Nitrogen and Japan DME) have all yet to be confirmed.
The decision by Methanex sparked speculation in the media that the move was a calculated gamble to extract more taxpayer money and cheaper gas prices.
While Methanex has denied it is seeking more government assistance, it did confirm what EnergyReview.Net reported last week - that it is considering dismantling part of its Motunui methanol complex in New Zealand and shipping it to Western Australia as a possible "replacement" for its stalled Burrup Peninsula project.
It was another big week for companies reporting full and half-year results. Despite an operating profit of $21 million, exploration write-offs of $61 million saw Sydney-based Novus Petroleum report a full-year net loss of $34 million. Nevertheless, the company said it wants to maintain its gas exploration drive in the US and Middle East.
Stuart Petroleum reported a maiden profit of $362,000 thanks to three producing wells in the Acrasia field in South Australia's Cooper Basin.
As for marine services provider, Mermaid Marine, it was a case of Dampier putting a damper on its bottom line. The Fremantle-based company posted a net loss of $13 million for the December half after writing down the value of its Dampier base and some of its vessels by $11 million.
Out in the frontier, Santos and Woodside breathed new life into the Bonaparte Basin after Santos boss, John Ellice-Flint, said the undeveloped Petrel/Tern fields are the "most logical" solutions for helping to meet Northern Australian gas demand. This could pave the way for a joint development with Woodside and its Blacktip discovery.
Woodside and partner AGIP Australia plugged and abandoned their second Bonaparte wildcat well, Weasel-1, this week. This follows the P&A of their first Bonaparte wildcat, Shakespeare-1, last week. Both wells were drilled as part of the permit's (WA-279P) obligations.
Staying in WA, the authorities awarded a new permit (WA-340P) in the Carnarvon Basin to a group of junior explorers. Meanwhile, Tap Oil kicked off its operated three exploration well drilling program in the Carnarvon Basin targeting prospects east of Barrow Island including Cyrano, Crackling South and Banjo.
Hoping for a better result than the one it got from the workover program it conducted at the Blina oilfield near Derby, Kimberley Oil said this week it has identified a new prospect in EP-129P, the Norman Prospect, which is said to hold 100 to 300 million barrels.
In Queensland, Mosaic Oil said gas has began to flow from its Churchie field into the Queensland grid at an initial rate of 5 million cubic feet a day.
Samson Investment Co, a US independent that has made over $US500 million worth of acquisitions since 1999, has farmed into minnow Sunshine Gas' two recent discoveries in Queensland. No doubt, many Australian executives will be excited with news that a Samson executive will soon visit Australia on the lookout for more deals.
In overseas news, Santos rejected media reports that it is looking to buy all of ChevronTexaco's portfolio of PNG assets. Afminex farmed out part of its Central Asian oil project in Kyrgystan to a Swiss oil fund. In Turkey, Amity said it intends to drill a prospect in that country's south that has geological structure three times the size of the producing Gocerler field.
Chinese oil firms spent $2.1 billion this week farming into oil fields in the Northern Caspian Sea in order to reduce its dependence on the Middle East. China will also look to gas imports from countries such as Australia to help an expected boom in LNG demand, according to ABARE.
Finally, deepwater drilling will drill a even bigger hole in capex budgets in the short term, according to respected analysts, Douglas-Westwood. Deepwater drilling share of global expenditure on drilling is expected to grow from 20% now to nearly one-third by 2007.
