EXPLORATION HISTORY
The Dorado field (Santos 80% (operator), Carnarvon Energy 10% and CPC 10%) was discovered in 2018 through the drilling of the Dorado-1 well in the Bedout Sub‑basin offshore Western Australia. It was subsequently recognised as the largest oil discovery on the North West Shelf in approximately three decades.
An extensive appraisal program conducted in 2019 confirmed the presence of high-quality reservoirs and strengthened its commercial case. The Dorado project has not reached a final investment decision (FID). Development has been delayed due to ongoing efforts to optimise project economics, reassess capital costs and respond to broader industry conditions.
RESOURCE POTENTIAL
The Dorado field is widely regarded as a high-quality offshore discovery with a substantial resource base. Current estimates indicate that the field contains approximately 162 million barrels of oil and condensate
and around 748 billion cubic feet of natural gas on a gross 2C contingent basis. Combined, these resources equate to approximately 344 million barrels of oil equivalent (Source Carnarvon Energy), positioning
Dorado as one of the most significant opportunities for an offshore liquids projects in Australia. Development concepts indicate a potential production rate of 60,000 barrels of oil per day from the Dorado
field for 10 years. The scale and quality of the resource base underpin Dorado’s strategic importance, both as a domestic supply source and as a contributor to export markets through oil and potential future gas production.
DEVELOPMENT CONCEPT
The Dorado development has been designed as a phased offshore project, integrating liquids production and potential future gas export. The initial phase focuses on oil and condensate production through a
wellhead platform connected to a floating production, storage and offloading (FPSO) vessel. The FPSO is intended to process, store and export crude oil while also supporting gas reinjection into the reservoir.
A second phase of development may involve the supply of gas to domestic markets in Western Australia or to LNG plants. This phased approach allows the project to prioritise liquids production while retaining
flexibility to monetise gas resources in the future. The broader development concept also accommodates the potential tie-in of nearby discoveries, creating an integrated production hub in the Bedout Sub-basin. There is the ability to sustain production over a multidecade project life if the nearby Pavo discovery can be developed via a tieback to the Dorado facilities
KEY CHALLENGES
COMMERCIAL VIABILITY
A primary challenge for the Dorado project is its commercial viability. Development costs are significant, with capital expenditure estimated to be in the order of US$2 billion. The joint venture has undertaken extensive redesign efforts aimed at reducing upfront capital requirements, including sizing of the processing facilities, phasing well development and considering the redeployment of an existing FPSO. The market environment is undergoing continuous transformation. The project must navigate an investment landscape that is becoming more complex due to decarbonisation policies, evolving investor preferences and the longer term implications of the conflict in the Middle East. These factors have contributed to reduced appetite for large-scale, longlife oil developments in many global capital markets.
PROJECT TIMING
Project timing and investment certainty also present major challenges. The final investment decision has been delayed beyond initial targets, and key development steps such as FEED progression and FPSO acquisition have been deferred pending further optimisation. These delays reflect both project-specific considerations and broader market dynamics affecting offshore oil investment. Santos stated earlier this year that it is ready to accelerate development of the Dorado project. Production could begin approximately four years after FID.
OUTLOOK
The Dorado field remains a high-potential development with the capacity to make a meaningful contribution to Australia’s future energy supply. Its large, relatively low-carbon resource base and proximity to existing onshore gas and LNG infrastructure support its long-term viability. At the same time, the project’s outlook depends on achieving a balance between technical feasibility, commercial competitiveness and
regulatory approval.
In the context of ongoing geopolitical instability, including the current Middle East conflict, the strategic rationale for developing fields that could supply domestic markets is likely to remain strong. Dorado’s proximity to refineries in South East Asia, and the lower freight costs compared with supplying Australian refineries, highlights the tension between using offshore petroleum projects to strengthen domestic energy security and maintaining commercial viability.
CONCLUSION
In the context of current geopolitical instability and constrained global supply, Dorado’s economics take on an additional strategic dimension. The Dorado oil and gas field represents one of Australia’s most significant undeveloped offshore petroleum resources. From a geological perspective, it offers a high-quality accumulation with the potential to support sustained production over many years. From a commercial perspective, however, it highlights the increasingly complex interplay between cost, risk and investment in modern offshore developments.