Australian energy company Santos has delayed key decisions regarding the Dorado Phase 1 liquids development project, located offshore Western Australia. This decision defers the final investment decision (FID) that was initially scheduled for 2025.

Project Status and Joint Venture Reevaluation

Santos, which holds an 80% operating stake in the Dorado joint venture, has decided not to proceed with acquiring a floating production storage and offloading (FPSO) vessel or advancing into the front-end engineering and design (FEED) phase. The Dorado joint venture also includes Carnarvon Energy (10%) and CPC’s subsidiary OPIC Australia (10%).

The project, which has been under development for several years, is now being reevaluated. As the joint venture partners assess the project timeline, Carnarvon Energy has indicated that updates will follow as the reassessment progresses.

Development Background and Future Plans

In 2021, Santos awarded a FEED contract for the wellhead platform (WHP) to Malaysian oil and gas service provider Sapura Energy. The platform was designed to operate remotely from an FPSO facility approximately 2 km away, hosting development and gas reinjection wells with minimal processing.

Originally, the Dorado project was planned as an integrated oil and gas development in two phases. The first phase aimed to produce oil and condensate, with gas reinjection planned to enhance recovery. The second phase was focused on gas production to support Santos’s domestic gas infrastructure in Western Australia, with initial production estimated between 75,000 and 100,000 barrels per day.

In July 2024, Carnarvon Energy revealed that the joint venture was optimizing the project’s economics by reducing the sizing of facilities and phasing well development. These measures were expected to lower the upfront capital expenditure (CAPEX), with any remaining wells to be drilled during production and funded through project cash flows.

Carnarvon Energy also explored the possibility of redeploying existing FPSO vessels or converting donor hulls, which would help cut costs and reduce time to first oil. With these optimizations, the overall CAPEX is now expected to be lower than the initially projected $2 billion.

Despite the delays, Carnarvon Energy remains confident in the project’s potential and has a strong balance sheet to support its share of development costs. CEO Philip Huizenga expressed disappointment over the delay but affirmed the company’s support for future drilling and initiatives to realize the value of the Dorado project.