Annual Report 200418
The diversification of Santos 
is evident in the creation of a
number of new higher margin
producing assets such as the
Bayu-Undan liquids project
offshore northern Australia, the
Casino gas field offshore southern
Australia, and the Mutineer-Exeter
oil and John Brookes gas fields
offshore Western Australia.
Outside Australia, Santos has also
built a core business in Indonesia
through new field developments
such as Oyong and Maleo. Santos
is further reinforcing its
capabilities to implement high
value offshore development
projects through an improved
drilling capability (including
deepwater and high pressure
reservoirs) and functional
leadership in the areas of
reservoir and production
engineering.
BAYU-UNDAN AND MINERVA
COMMISSIONED
There has been considerable
progress on all of these projects
during 2004 with two projects
being commissioned: Bayu-Undan
liquids and Minerva gas.
Bayu-Undan started liquids
production in April 2004 and 
was ramped up during the year 
to meet an increased design
throughput of 1.1 billion cubic
feet per day of raw gas. This
resulted in liquids production of
more than 100,000 barrels per
day. This excellent performance
generated production for the year
of 19 million barrels – 22% above
expectations.
The liquids project involves
extracting and processing wet gas
to remove condensate, propane
and butane (liquids) before re-
injecting dry gas back into the
reservoir for later use as part 
of the future LNG stage of 
the project. 
The liquids are loaded onto a
Floating Storage and Offloading
facility. Santos has a 10.6%
interest and is the only
Australian-owned company
involved in the project, which
was recently rated as one of the
top 100 projects to change the
world by Goldman Sachs JBWere.
The other project that
commenced production during 
the year was the Minerva gas
field in the Otway Basin offshore
Victoria which started up 
in December.
While Santos' share of production
is only 10%, the project has
greater significance for Santos
because it has enabled the
commencement of direct-to-
customer marketing through
Santos Direct.
MUTINEER-EXETER
COMMISSIONING
Another important project for
Santos is the Mutineer-Exeter 
oil fields development.
Despite disappointments
regarding the size of reserves
during development and appraisal
drilling, the construction and
connection of the fields
proceeded at a rapid pace with
the project 89% complete by 
year end.
The conversion of the state-of-
the-art Floating Production
Storage and Offloading facility
was completed at the Jurong
shipyard in Singapore in
December 2004 with no lost time
safety incidents despite a massive
workforce completing over two
million work hours. 
Named the MODEC Venture 11, 
the vessel left Singapore in early
2005 to take up anchorage in the
Carnarvon Basin off the Western
Australian coast. First oil
production from Mutineer-Exeter
is starting about three months
ahead of schedule.
Four high-tech horizontal wells
have been drilled and completed,
which are expected to provide
initial peak plateau oil production
of 70,000 to 90,000 barrels per
day. The wells are fitted with dual
electric submersible pumps and
are supported further by seabed
flow boost pumps to maintain
high well rates throughout 
field life.
Santos, with the assistance 
of external experts and other
members of the joint venture,
assessed the risk of reserve
uncertainty against the
incremental value to be created
by a fast-track development and
decided to proceed with the
development, which was designed
to provide substantial flexibility
to cope with a wide range of
production rate and reserve
outcomes. 
The project will come on stream
earlier than expected, delivering
strong cash flow in this high oil
price environment. Coupled with
this, the project will cost at least
10% less than budget.
CASINO AND JOHN BROOKES
SANCTIONED
While two projects came into
production, Santos added two
more to the development
conveyor with the sanctioning of