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Three new developments started production

Robust analysis coupled with advanced technology and development techniques delivered strong results across Santos’ portfolio of oil and gas projects in 2006.

processing at a single train LNG plant at Wickham Point, Darwin.


The Cooper Basin Oil and Mutineer- Exeter projects are two examples of Santos breaking new ground in drilling and development activity. The skills and knowledge gained on such projects can be leveraged across all of the Company’s activities.

Underpinning the Company’s approach to the planning, implementation and construction of new oil and gas facilities is the Santos Quality Asset Development (SQAD) process.

This is a structured framework in which the Company appraises projects, assesses risks and rewards, undertakes investment decisions, initiates Front End Engineering and Design (FEED) and ultimately brings a project to production.

decision on the project to be made in the second half of 2007.

Santos has a number of attractive exploration prospects in tenement VIC/P44, which hosts Casino and Henry, to be drilled in late 2007 and 2008. If successful, these prospects would add to the resources which could be developed in conjunction with the Henry gas field.


Santos’ first offshore operated gas field outside Australia, the Maleo gas project located off the East Java coast in Indonesia, came on-stream in September 2006 and soon achieved its contracted production level of approximately 80 TJ/day.

In 2006 Santos achieved several milestones in the ongoing development of the Mutineer-Exeter oil fields.

The phase three drilling program was successfully completed with two new development wells brought online increasing production rates from 35,000 bopd to over 50,000 bopd.

The program successfully executed the longest offshore directional well drilled by Santos at a total measured depth of 4,822 metres.

An extensive high-definition 3D seismic survey over the Mutineer- Exeter fields was acquired and processed during 2006 and is now being used to optimise the 2007 appraisal and development program.


SQAD played an important role in the Casino gas field development which was brought into production in record time and ahead of budget early in 2006.

Located 30 kilometres off Victoria’s south-west coast, Casino performed well in its first year, producing an average of 100 mmscf/d of gas with limited downtime.

Casino is the centrepiece of an emerging gas hub in the Otway Basin where the Henry gas field, located 8.5 kilometres north-west of Casino, has advanced in Santos’ development pipeline.

The Company approved the commencement of FEED for Henry in late 2006, with a final investment

The Maleo field, containing gross 2P reserves of 240 billion cubic feet of gas, was developed using a jack-up rig converted into a Mobile Offshore Production Unit connected to a short pipeline to existing production infrastructure in the area.


The first shipment of LNG from the Bayu-Undan processing plant in Darwin during February 2006 was a major milestone for Santos. With a 10.64% interest, Santos is the only Australian company involved in this project which is operated by ConocoPhillips.

The LNG phase of the project involves the transportation of lean gas from the Bayu-Undan fields in the Timor Sea via a 500-kilometre subsea pipeline for


Santos’ innovative approach to oil field development can also be seen in the Cooper Basin Oil Project in 2006, with three state-of-the-art truck-mounted rigs delivering a 20% improvement in drilling performance together with more sustainable drilling operations.

With the introduction of these new rigs, Santos has implemented a number of improvements to the traditional lease size, layout and construction methodology that minimises the environmental footprint.

Santos is the only company in Australia with the acreage, infrastructure, equipment and know-how to be able to undertake this ambitious 1,000-well program over five years.

18 Santos Annual Report 2006

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