REG-Mitsui & Co Ltd Final Investment Decision Made for Development of Australian Oil Fields <Origin Href="QuoteRef">8031.T</Origin>

Mitsui & CoAnnouncement

27/06/2016 07:07

Final Investment Decision Made for Development       of Australian Oil Fields
      Mitsui & Co., Ltd.    
Final investment decision made for development       of Australian oil fields
      Mitsui & Co., Ltd. (Mitsui) is pleased to announce that it has made       final investment decision for commercial development of a group of       undeveloped oil fields located offshore Western Australia (Greater       Enfield Project) in which Mitsui owns 40% working interest through its       100% subsidiary Mitsui E&P Australia Pty Ltd. (MEPAU) The decision was       made jointly with Woodside Energy Limited (Woodside), the operator of       the oil fields with the remaining 60% working interest. The development       will involve about US$1.9 billion (US$800 million net to MEPAU) of       investment for drilling of production wells and construction of subsea       facilities, aiming to commence production of crude oil by around       mid-2019.    
      Mitsui acquired its working interests in the Enfield and Vincent oil       fields, located about 60km offshore Western Australia, in 2004. Greater       Enfield Project includes undeveloped reservoirs that are located within       the same area as the Enfield and Vincent oil fields. The development       concept is centered on utilizing the existing production facility (the       Ngujima-Yin Floating Production Storage and Offloading unit, or FPSO)       at the Vincent oil field, through which it achieves integrated       operations and a reduced capital requirement compared to a stand-alone       development.    
      Greater Enfields reserves were accumulated through post-acquisition       exploration and appraisal activities. The current development concept of       using an existing FPSO to reduce capital expenditure while taking       advantage of declining drilling and facility costs caused by the falling       oil price have improved the cost competitiveness of the project. These       factors have led to our view that economic feasibility of Greater       Enfield Project can be sustained even under prolonged current market       conditions, and therefore to our decision to commercially develop these       reserves. It is through Greater Enfield Project that MEPAUs technical       expertise gained over the years from development and production of       Enfield and Vincent oil fields is expected to supplement MEPAUs       production and reserves in a cost competitive manner with due care to       safety and the environment.    
      Currently, Enfield and Vincent crude oils are marketed jointly with       Woodside through Mitsui & Co. Energy Trading Singapore Pte. Ltd.,       Mitsuis 100% subsidiary, and we expect the same for Greater Enfield       crude oil as well. There are several undeveloped reservoirs in the same       permit as Greater Enfield, which we will continue to work to determine       their commercial potential.    
      Mitsuis upstream energy business aims to achieve high quality low cost       reserves by taking advantage of current market conditions and continuing       to reinforce our three key strengths, namely reserves, production and       cost competitiveness, and to pursue strengthening the competitiveness of       our earnings base.    
      The effects of this decision on Mitsuis profit forecast for the year       ending March 2017 is expected to be minor.    
Project Summary
          Permission        
          WA-28-L, WA-59-L        
          Location        
          Carnarvon Basin, 60km offshore Western Australia        
          Water Depth        
          550~850m        
          Interest Holders        
          60% Woodside Operator
40% MEPAU        
          Oil Fields        
          Laverdadiscovered in 2000          
            Cimatti discovered in 2010          
          Recoverable Reserves        
          69 million boeproject 100%        
          Total Development Cost        
          Approx. US$1.9 billion (US$800 million)        
          Production Start        
          Mid 2019        
      The proposed Greater Enfield Development, involving a subsea tie-back to       the Ngujima-Yin Floating Production Storage Offloading (FPSO) vessel,       image courtesy of Woodside.    
Woodside Summary
          Company Name        
          Woodside Energy Limited        
          Headquarters        
          Perth, Australia        
          Traded on        
          Australian Stock Exchange        
          Business        
          Exploration & Production, LNG        
          Total Assets *        
          US$23.8 billion        
          Total Production *        
          253 thousand boe per day        
      * Fiscal Year 2015    
View source version on businesswire.com: http://www.businesswire.com/news/home/20160626005062/en/
      Mitsui & Co Ltd