Australian oil and gas major Santos has made a final investment decision (FID) for the $235m Phase 3C infill drilling programme at the Bayu-Undan offshore field.

The Bayu-Undan field is located 500km offshore Darwin, Australia, in the Timor Sea, and is 250km south of East Timor.

The drilling programme calls for two platform wells and one subsea well to develop further gas and liquids reserves.

Santos said that the drilling campaign, which is expected to start in the second quarter of this year, would extend the life of the offshore facilities and onshore Darwin LNG plant.

The ‘Noble Tom Prosser’ semi-submersible will drill the wells.

Production from the first well is expected in the third quarter this year.

Santos managing director and CEO Kevin Gallagher said: “We are delighted to be able to pursue an opportunity that wasn’t on the table 12 months ago, which will optimise field recovery, extend production and deliver significant value to both the Bayu-Undan Joint Venture and the people of Timor-Leste.

“Only through a close and constructive working relationship with the Timor-Leste Government and our joint venture partners have we been able to move so quickly towards our shared goal of maximising value from the Bayu-Undan field.

“This infill drilling programme adds over 20 million barrels of oil equivalent gross reserves and production at a low of cost of supply and extends the life of Bayu-Undan, reducing the period that Darwin LNG is offline before the Barossa project comes on stream.”

Santos’ 68.4% stake operated interest in Bayu-Undan and Darwin LNG will reduce to 43.4% upon completion of a 25% stake sale to South Korean energy group SK E&S.