Exxon, BHP Plan A$1.4 Billion Australian Oil Project

By Angela Macdonald-Smith

July 25 (Bloomberg) -- Exxon Mobil Corp. and BHP Billiton Ltd., partners in the Gippsland Basin oil and gas venture in Australia, approved spending about A$1.4 billion ($1.3 billion) on a project off the southeast coast to meet rising demand.

Construction of the Turrum field will start next year, allowing oil production to start up in 2011, followed by gas sales in 2015, Exxon's Australian unit said today in an e-mailed statement.

Turrum holds about 1 trillion cubic feet of gas and 100 million barrels of oil and gas liquids, enough energy to power a city of a million people for 20 years. The project, which will have a life of about two decades, will help meet Australian gas demand that is set to rise by 3.8 percent a year through 2030, Exxon estimates.

``Turrum is our next exciting project,'' Mark Nolan, Exxon Mobil Australia chairman, told reporters on a conference call from Melbourne. ``Turrum is one of the largest gas developments to be brought online in the history'' of the Gippsland Basin venture, he said.

BHP, which has a 50 percent stake in the venture, said separately in a statement to the Australian stock exchange that it approved spending of $625 million on Turrum.

The project will assist energy security in southeastern Australia, Victorian Premier John Brumby said on the conference call.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net