Santos buoyant on growth outlook

Santos Ltd. said on Friday it will lift this year's exploration spending by 11 percent on earlier forecasts as the Australian energy group continues to diversify from its core Cooper Basin assets, the Dow Jones Newswires reported on Friday from Adelaide..

Adelaide-based Santos also reiterated that production will grow by 10 percent next year as it brings online new oil and gas projects in Australia and Indonesia.

"Overall, your company clearly is in a stronger growth position now than at any time in its history," Chairman Stephen Gerlach told shareholders at Santos' annual meeting.

Chief executive John Ellice-Flint said the company expects to meet its production forecasts of around 54 million barrels of oil equivalent during calendar 2005 - compared with 47 million barrels in 2004 - with a further increase of at least 10 percent next year.

Santos plans to start four new projects in the next 12 months, including two domestic Australian gas ventures, the Bayu-Undan liquefied natural gas project in the Timor Sea and the US$115 million Oyong oil and gas field offshore Indonesia.

Ellice-Flint also said Santos will increase this year's exploration budget to A$170 million for the drilling of 28 wildcat exploration wells.

"This is up from A$153 million previously advised and is 35 percent higher than the A$126 million spent in 2004," he said.

Santos' biggest exploration success in recent times is the Jeruk oil field offshore Indonesia, where the company plans to drill additional appraisal wells, "possibly starting in the fourth quarter", Ellice-Flint said.

"Options for potential early production from the Jeruk field are also being evaluated," he said.

Jeruk is estimated to hold at least 170 million barrels of oil, with some analysts speculating it may contain more than 500 million barrels.(*)