- Triangle Energy (TEG) and Pilot Energy (PGY) sign a binding offtake agreement with BP Singapore for crude oil produced from the Cliff Head Oil Field
- The Cliff Head Joint Venture (CHJV) is held 78.75 per cent by Triangle as operator and 21.25 per cent by Pilot
- BP Singapore will purchase all the crude oil from the CHJV, as well as a mix of other products from other producers
- Shares in Triangle Energy closed up 16.67 per cent to 2.1 cents, while Pilot Energy closed down 1.79 per cent to 5.5 cents
Triangle Energy (TEG) and Pilot Energy (PGY) have signed a binding offtake deal with BP Singapore for the sale and purchase of crude oil from the Cliff Head Oil Field.
Triangle had previously hinted at the prospect of the deal in April, when it signed a Product Storage and Services agreement with BP Kwinana. According to the announcement, Triangle and Pilot — which together form the Cliff Head Joint Venture (CHVJ) — would store crude oil in two tanks at the refinery in Kwinana, Perth.
Under the latest agreement, BP Singapore will purchase 100 per cent of the crude oil produced at the CHJV, along with a mix of other crude and condensate products from other producers.
Triangle, as operator of the CHJV, has also agreed to act as the operating agent for those other sellers.
The initial term of the offtake agreement coincides with that of the storage deal — one year from April 22, 2021 — with pricing fixed at a discount to Brent.
BP Singapore has also been given the right to match any offers for the sale of products from Cliff Head on a standalone basis for a period of three years. However Triangle, Pilot and the other producers may be subject to penalties and liabilities if that product doesn’t meet the necessary specifications.
“This provides certainty to the CHJV regarding upcoming oil production and continues the significant contribution to the West Australian community,” Managing Director of Triangle Robert Towner said.
“The Cliff Head Oil Field, together with its significant infrastructure, is now capable of continuing to take oil to the market, as well as providing the base upon which further exploration and development success in the permit areas may be exploited.”
Located in the Perth Basin, roughly 270 kilometres north of Perth and 12 kilometres off the coast of Dongara, the CHJV — owned 78.75 per cent by Triangle and 21.25 per cent by Pilot — currently produces between 800 and 900 barrels of oil per day.
It was the first commercial oil discovery developed in the offshore Perth Basin, with production starting in May 2006 after roughly $327 million was spent — prior to Triangle and Pilot’s involvement — on development. To date, the oil field has produced more than 14.8 million barrels of oil.
Shares in Triangle Energy closed up 16.67 per cent at 2.1 cents, while Pilot Energy closed down 1.79 per cent at 5.5 cents.