By Ross Kelly
SYDNEY--Woodside Petroleum Ltd. (WPL.AU) pulled out of an
exploration joint venture in Tanzania with Beach Energy Ltd.
(BPT.AU), leaving its smaller Australian rival to ponder whether to
continue to drilling in the East African country.
Less than a year after buying into the exploration permit at
Lake Tanganyika, Woodside decided not to take part in the next
phase of exploration, Beach said Wednesday.
It means Woodside will transfer its 50% stake in the exploration
permits to Beach, which will reclaim 100% ownership. Beach said
it's "currently assessing all options" for the block.
Woodside's withdrawal marks the second blow for Beach this year
after Chevron Corp. (CVX) in March pulled out of a shale-gas joint
venture with the Australian company in the Outback. It also comes
after Beach hired a former senior Woodside executive, Robert Cole,
to be its new chief executive.
East Africa has become a new frontier in global energy markets
following some mammoth deepwater natural gas discoveries off the
coast of Tanzania and Mozambique. Tumbling oil prices, however, are
forcing companies including Woodside and Chevron to reassess their
spending plans.
Beach's assets comprise the entire South Block of Lake
Tanganyika, a giant inland lake of water more than 600 kilometers
long and almost 100 kilometers wide.
The magnitude of any investment there would depend on where the
best prospects are located. Developing prospects closer to land
would be cheaper because a horizontal well could be drilled from
the shore, whereas deepwater targets in the lake's center would
require a specialist rig.
Write to Ross Kelly at ross.kelly@wsj.com
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