Cliff Head blows the budget by $20m

DELAYS at the Cliff Head oil field in the offshore Perth Basin have resulted in a $A20 million or 7.5% budget blowout to the most recent project estimate of $265 million, project partners Roc Oil and Australian Worldwide Exploration said this morning.
Cliff Head blows the budget by $20m Cliff Head blows the budget by $20m Cliff Head blows the budget by $20m Cliff Head blows the budget by $20m Cliff Head blows the budget by $20m

This revised budget is much higher than the initial $227 million estimate provided at final investment decision last March. It also excludes the $15 million spent increasing the project’s scope.

Roc and AWE blamed the latest budget increase on a three-week drilling delay, due to several factors including two stuck-pipe instances, both of which have now been resolved. Further delays were caused by the unavailability of contractor personnel, adverse weather delaying the offshore platform-pipeline hook up and equipment at the Arrowsmith Stabilisation Plant.

But the good news is the first two oil production wells, CH-7H and CH-6, are expected to deliver first oil to the ASP by mid-April, the partners said.

The remaining development wells will then be brought on-stream throughout the rest of April and May to ramp up total field production to more than 10,000 barrels of oil per day.

Despite the delays, the companies said good progress has been made in other areas of the development.

The onshore ASP, which will receive the oil produced from Cliff Head, is mechanically complete, with all pipelines and umbilicals successfully hydro-tested and fuel gas sourced from Arc Energy delivered to the plant.

In its first year, Cliff Head oil production is expected to account for 10% of Western Australia’s oil consumption, according to AWE and Roc.

The Cliff Head JV comprises Roc, which holds a 37.5% stake, AWE Oil (27.5%), Wandoo Petroleum (24%), Arc Energy (6%) and CIECO Exploration and Production (5%).

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