WA oil producer Triangle Energy Global has formalised a deal to reduce its stake in the Cliff Head Joint Venture, or “CHJV” partnership shared with ASX-listed Pilot Energy.
The company currently owns 80 per cent of the project but has agreed to sell off half its rights for $1 million – a sum projected to hit its coffers by the second quarter of next year, pending a government review of the duo’s proposed carbon capture and sequestration plan for the site.
Once the proposal has been waved through by the National Offshore Petroleum Titles Administrator – the body responsible for reviewing the proposal - Pilot will control 60 per cent of the CHJV and importantly pick up operational control of the project.
The CHJV is a corporate tie-up that sees the pair co-own a range of assets, including the producing Cliff Head oil field about 270km north of Perth, the Arrowsmith stabilisation plant, a host of well infrastructure, numerous pipelines and several federal and state pipeline licences.
Triangle Energy and Pilot are currently churning out around 700 barrels of oil per day at Cliff Head however they also aim to use the operation’s sub-surface oil reservoirs to store carbon once the field has been depleted.
The joint venture currently host a contingent carbon dioxide resource of about 6.4 million tonnes and plan on storing or “sequestering” this material underground at a rate of about a million tonnes per year over 13-years once oil production has wrapped up.
Carbon capture and sequestration or “CSS” initiatives are quickly becoming hot-button topics in the energy space owing to the processes’ claimed ability to tackle rising greenhouse gas emissions.
Recent studies suggest the process could be used to store about 14 per cent of the planet’s carbon by 2050.
CSS is generally regarded as the practice of capturing carbon dioxide created during power generation and industrial activities and storing the material in in subsurface pockets that once housed oil and gas resources or saline aquifers.
The features are considered to boast an almost peerless ability to hold carbon dioxide in a way that is yet to be successfully repeated by artificial storage devices. The activity could also breathe new life into depleted energy assets.
Triangle says it has applied to have its reservoirs assessed for their carbon storage abilities and should have an answer by early next year.
If granted, the current ownership structure will be rebalanced immediately, leaving Pilot in operational control of the CHJV’s future CSS’s services and its current oil production.
Triangle Energy Global’s Managing Director, Conrad Todd said:“Our co-operative Joint Venture will both re-arrange Triangle’s abandonment liability and re-task the existing facilities for at least the next 10-20 years. We are especially pleased that the CHJV will be making a significant contribution to the reduction to the carbon dioxide emissions in Western Australia.”
Perth-based Triangle believes the CHJV field could still produce oil for years to come and to promote a seamless handover will allow Pilot to utlise the staff of its subsidiary Triangle Energy Operrations – the group behind the assets current production.
The company says the CSS development could extend the Cliff Head project’s life by up to 20 years and deliver a net present value of between $110 and $210 million.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
