Shell may join Woodside-rival Chevron
Oil major Royal Dutch Shell is likely to join Chevron's Wheatstone liquefied natural gas project in competition with Woodside Petroleum's Pluto project.
Reports said both companies' successful offshore exploration in Western Australia have increased the chances of a team up between the two.
According to Goldman Sachs JBWere, the Chevron-operated exploration had shored up 6 trillion to 7 trillion feet of gas.
Goldman analyst Aiden Bradley believed Shell would not be content with its 34 per cent interest in Woodside beyond mid-2012 if Woodside chief executive Don Voelte could not start on the $30 billion-plus Browse LNG project at James Price Point, north of Broome.
Aside from 50 per cent and 25 per cent stakes in recent exploration wells, Shell owns part of the offshore Iago field, from which Chevron intends to feed the Wheatstone plant.
"We are refining our understanding of the proposed development, including the commercial terms under which Shell would join," a Shell spokeswoman said.
Goldman Sachs said Chevron and Shell had acquired some of the most prospective blocks in the Carnarvon Basin before 2006, beating Woodside, which only began expanding its acreage after the 2005 Pluto discovery.
"If Shell and Chevron continue to have a high level of success . . . Shell is likely to become more involved in the Onslow development, in direct competition to Pluto," Mr Bradley said.