PetroChina Buys into Southern Canning Basin Project

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Researched by Industrial Info Resources (Perth, Australia)--Petrochina Company Limited, one of the world's largest companies, is now a major partner in a West Australian petroleum lease. The deal has received approval from the Australian federal government and the Chinese government, but it still awaits approval from the Western Australian Department of Mines and Petroleum. This is believed to be a mere formality and is not expected to cause any delays.

PetroChina, the largest energy company in China by market value and revenue, purchased a 29% stake from ConocoPhillips (NYSE:COP) (Houston, Texas) in the Southern Canning Basin Project. The equity percentages in the Southern Canning Project are now 46% for ConocoPhillips, 29% for PetroChina, and 25% for New Standard Oil (ASX:NSE) (West Perth, Australia).

Despite being the minority share holder, New Standard Oil remains the operator, while the joint venture partners seek to continue exploration and development of the petroleum lease. The Southern Canning Project is New Standard's flagship Australian project and spans the largest and most prospective sections of the Goldwyer formation in the Canning Basin. In a review of global shale gas resources, the U.S. Department of Energy's Energy Information Administration estimated the Goldwyer shale contained 764 trillion cubic feet of risked gas in place and 229 trillion cubic feet of risked recoverable gas, the largest estimate placed on any basin in Australia.

Originally named the Goldwyer Project, New Standard renamed it to the Southern Canning Project after learning, through consultation with traditional owners, that certain "cultural sensitivities" existed around the previous name. Phil Thick, New Standard's managing director, says that this reflects the joint venture's commitment to community, heritage and respect for the culture and history of the traditional owners on whose land the project operates.

In announcing the new ownership percentages, Thick also said: "New Standard now has two truly world-class partners in the Southern Canning Basin. The combined partnership gives New Standard access to funding, technical expertise, development experience and potential off-take capacity, and it creates a formidable global partnership to help progress the joint venture."

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