AUSTRALIA'S WOODSIDE WINS APPROVAL FOR FIRST OFFSHORE PROJECT.

PERTH, June 1 Asia Pulse - Australia's second-largest oil and gas producer Woodside Petroleum Ltd (ASX:WPL) will be pumping oil in West Africa by March 2006 after yesterday giving development approval for its majority-owned Chinguetti project.

The $US600 million ($A842 million) development, which will be the maiden overseas venture operated by Woodside and the first oil production in Mauritania, is the third of six investment decisions Woodside has flagged this year to boost falling production.

At an initial production rate of 75,000 barrels per day, Chinguetti could contribute around 11 per cent of the company's annual output and as much as 12 per cent of its annual revenue between 2006 and 2008.

However, analysts are expected to adjust their net present value estimates for the project to account for a three month delay from the original start-up schedule, and a higher capital expenditure than earlier indicated by Woodside's joint venture partners.

"The fact is, at 75,000 barrels per day, each one month delay is equivalent to over one million barrels to Woodside, so it is important," UBS Securities Australia Ltd energy analyst Gordon Ramsay said.

The delay was because of the timing of vessel availability and the award of contracts, Woodside chief operating officer Keith Spence said.

This first phase of the Chinguetti development will involve about 11 wells - six production wells, four water injectors for reservoir pressure support, and one gas injection well to return surplus gas not required for fuel to a nearby reservoir.