Focus on Kufpec as Santos shortlists bidders for Dorado project

Santos chief executive Kevin Gallagher. Picture: NCA NewsWire / Morgan Sette

Santos is believed to have shortlisted bidders for round two in the contest for a stake in its Dorado project in Western Australia.

It is understood that a stake of about 25 per cent, expected to be worth about $500m, is on offer through investment bank Goldman Sachs.

Among those in the race is Kufpec, and the sale process has drawn interest from Southeast Asia.

Kufpec, also known as the Kuwait Foreign Petroleum Exploration Company, is an international upstream oil company that is engaged in exploration, development and production of crude oil and natural gas.

Earlier, Japanese trading houses Mitsubishi and Mitsui were considered logical acquirers.

Santos owns 80 per cent of the project, with Azure Capital-advised Carnarvon Energy the remaining holder.

Carnarvon sold a 10 per cent stake to Taiwan’s CPC for $US146m in February.

Sources have suggested that Taiwan’s CPC might increase its interest, and Indian companies could consider an acquisition.

Dorado is an integrated oil and gas project that will be developed in two phases.

The Dorado and Pavo fields are estimated to contain gross 2C recoverable contingent resources of 189 million barrels of liquids and 401 petajoules of gas.

The Santos share is 147 million barrels and 320 petajoules respectively.

A final investment decision on the proposed Dorado project was deferred in 2022 so that further work could be undertaken on the integrated development concept. Santos, which merged with Oil Search in 2021, is understood to be keen to examine expansion opportunities around the US to allow it to diversify and expand beyond the Australian east coast gas market.

Santos told the market last week, ahead of its August 23 half-year results, that it had $4.1bn of net debt, $US1.3bn of sales revenue in the second quarter and more than $US1.1bn of free cashflow in the first half.

Santos managing director Kevin Gallagher said the underlying business remained strong and had continued to perform well in a volatile oil price environment.