In a sign that the tide is starting to turn for the offshore oil and gas sector, Woodside Energy Ltd. and partner Mitsui E&P Australia have agreed to spend US$1.9 billion to develop the Greater Enfield reserves offshore Western Australia.

The project, which entails developing the Laverda Canyon, Norton over Laverda (WA-59-L) and Cimatti (WA-28-L) oil accumulations, is targeting 2P reserves of 69 million barrels of oil equivalent (MMboe.) Plans call for six subsea production wells and six water injection wells, with reserves being produced via a 31-km subsea tieback to the existing Ngujima-Yin FPSO facility in the Vincent Field, which cuts expenses for the project.

“We have achieved investment spend at the low end of our guidance range by leveraging the latest technologies and using existing FPSO infrastructure,” Woodside CEO Peter Coleman said June 27. “This allows us to accelerate the development of previously stranded resources.”

First oil is expected in mid-2019.

“Greater Enfield is a demonstration of our phased and sustainable approach to growth,” Coleman added.

The decision to proceed with the project comes as commodity prices continue to fluctuate following the U.K.’s decision to leave the European Union, a move that knocked down oil prices by 6% early June 24. However, analysts don’t believe Brexit will have a long-term impact on prices, which have risen from a low point of about $27 per barrel (/bbl) to nearly $49.

As the market works to rebalance itself, oil and gas companies have focused on finding better technology, trimming costs and spending, reworking field development concepts and renegotiating contracts to improve project economics.

Unfavorable economics prompted Woodside and its partners to shelve the Australian Browse LNG project in March amid challenging market conditions. At the time, Woodside said it remained committed to the project and would work with JV partners—BP, Shell, Japan Australia LNG and PetroChina—to prepare a new work program and budget to progress the development while seeking further capital efficiencies.

Such moves—specifically breakthroughs in the development concept, technology and contracting—made monetizing the Greater Enfield project possible, Coleman said.

OneSubsea, now a Schlumberger company, landed the FEED contract for Greater Enfield in September 2015. Its workscope includes designing the full subsea production architecture solution, including subsea multiphase boosting. OneSubsea said it aims to deliver capex savings through standardized hardware and integrated subsea production and boosting controls technology.

The project will be supported by subsea multiphase booster pumps in the Laverda area and gas lift in the Cimatti area, Woodside said.

“With development costs of less than $28 a barrel, Greater Enfield is an attractive project in a low-price environment,” Coleman said.

The company expects the project will increase its reserves by 41 MMboe.

Woodside serves as operator with a 60% stake, while Mitsui E&P Australia holds the remainder.

“We’ve made a final decision as development costs have fallen due to sliding oil prices,” a Mitsui spokeswoman said.

Oil futures are now near $50 per barrel, off more than 12-year lows plumbed earlier this year but still far below their 2014 peaks of above $100. U.S. gas prices have also risen more than 10 percent this year, prompting Japan’s Tokyo Gas to buy a 25%stake in an Eagle Ford shale gas formation.

The project is one of several getting the green light.

A week ago BP and partner Egyptian Natural Gas Holding Co. (EGAS) sanctioned phase one of deepwater Atoll development in Egypt’s Mediterranean Sea. First gas is expected in 2018.

Earlier on June 27, commodities giant BHP Billiton said it planned to boost its fiscal 2016 exploration budget, focusing on offshore developments in the Gulf of Mexico and off the coast of Western Australia.

Velda Addison can be reached at vaddison@hartenergy.com. Reuters contributed to this report.

Offshore