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THE WALL STREET JOURNAL: Woodside Buys Shell’s Oil Assets In Australia Field

By REBECCA THURLOW
February 12, 2008

SYDNEY, Australia — Woodside Petroleum Ltd. said it has agreed to buy Royal Dutch Shell PLC’s oil assets in Australia’s North West Shelf project for US$398.5 million.

The deal will double Woodside’s share of the oil-output arm of the North West Shelf, namely the Cossack Pioneer field, which produces 80,000 barrels of oil a day.

Woodside Chief Executive Don Voelte said the acquisition will boost the company’s cash flow and earnings.

“The North West Shelf has laid a sound business platform for Woodside over two decades and we are very pleased that this transaction will further consolidate our position in the North West Shelf ventures,” Mr. Voelte said.

Woodside is the operator of the 20 billion Australian dollar (US$17.9 billion) North West Shelf joint venture and has an equal stake with partners Shell, Chevron Corp., BHP Billiton Ltd. and Japan Australia LNG, a joint venture of Mitsubishi Corp. and Mitsui & Co.

For Shell, the disposal of the assets frees the company to focus on its Australian natural-gas business, which includes the giant Gorgon gas field off the Western Australian state coast that recently won federal approval.

Shell’s North West Shelf oil assets include its share in the Cossack, Wanaea, Lambert and Hermes oil fields, including the Cossack Pioneer production facility. The sale will increase Woodside’s participating interest in these assets to 33.3%.

In a related agreement, Shell will have a “right of final offer” for Woodside’s assets in Libya should Woodside agree to proceed with a sale, Woodside said. Woodside has previously advised it is examining its options in relation to its remaining African assets, which may include further sales.

Write to Rebecca Thurlow at [email protected]

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