New Frontiers for WA, Cooper Basin & the Top End
Northern Territory enters the stage By Steven Gerhardy
The NT is emerging as one of Australia’s most dynamic and exciting oil and gas industry hubs. Offshore activity based around projects such as Bayu-Undan/Darwin LNG, Blacktip and Ichthys has attracted a lot of attention, but the prospect of major onshore oil and gas finds is now also drawing serious exploration investment.
The Mereenie and Palm Valley fields in central Australia’s Amadeus Basin were first developed in the 1960s. But since then there has been no new onshore oil and gas production and onshore exploration has been sporadic and sparse. However, the Amadeus — which continues to be a significant source of gas supply — provides valuable infrastructure that could help commercialise new petroleum finds.
This existing infrastructure and new perspectives on the NT’s potential for rich onshore oil and gas fields have drawn a new generation of onshore explorers.
The development of a commercial shale and tight gas sector in the US and new perspectives on geology have prompted a reassessment of the NT’s onshore petroleum potential. Several NT basins are believed to have geological similarities to US shale gas regions and could hold large gas resources.
Big players such as Santos, StatOil and Total SA have followed juniors such as Central Petroleum, Blue Energy, Falcon Oil & Gas, Pangaea Resources, Tamboran and Armour Energy into the onshore NT. These companies are now undertaking, preparing for, or planning exploration campaigns targeting a wide range of potential oil and gas reservoirs.
And it’s not just the Amadeus Basin — previously ignored areas such as the onshore Bonaparte, the Pedirka, the Wiso, the Beetaloo, the Macarthur and the Georgina basins are also being explored.
Darwin relies on gas from the Amadeus and from the Blacktip offshore field. Shale gas offers the opportunity to expand and diversify the Territory’s gas market and further strengthen natural gas as a cornerstone of the NT economy.
It’s still early days, but if onshore NT exploration is successful, shale and tight gas development will offer job creation and economic opportunity in remote regions, improve regional infrastructure and services, benefit indigenous communities and pastoralists, and create significant revenue for the Territory and Australian governments.
Meanwhile, offshore exploration continues to expand in the Timor Sea and Bonaparte Gulf.
Cooper keeps on keeping on
Australia’s oldest gas province has a new lease of life.
At its peak, in the early 1990s, the Cooper Basin produced about 200 petajoules (PJ) of gas a year before slipping into decline. Production fell to 91.8PJ in 2011, but it increased to 94.4PJ in 2012.
New gas projects and infill drilling are now driving up production. Oil and gas consultancy, EnergyQuest, forecasts that gas projects targeting traditional sandstone reservoirs will be producing about 170PJ/year towards the end of this decade. And when this source of gas production begins to decline, new sources will be ready to step into the gap.
By 2020, the Cooper Basin’s gas production will again be at around 200PJ/year, thanks to shale gas and tight gas projects coming onstream, according to EnergyQuest.
The Cooper has long been the province of Santos, Beach Energy and a handful of juniors. But promising results from new projects have prompted two major international players — Chevron and BG Group — to farm-in to Cooper Basin projects.
The region is also attractive for its well-developed oil and gas infrastructure and because it operates under South Australia’s onshore oil and gas regulatory framework, widely recognised as being the best in the country.
APPEA Chairman and Santos Chief Executive David Knox told the 2013 APPEA Conference that South Australia’s regulatory systems mesh well with real-life operational best practice.
“The industry is held to high standards, but the regulation is sensible, streamlined and based on sound science and technical practice, Mr Knox said.
Notable gas projects and ventures in the South Australian portion of the Cooper Basin include:
- the SACB JV (South Australian Cooper Basin Joint Venture) infill drilling program (Santos, Origin Energy and Beach Energy)
- the Moomba Shale Gas project (Santos)
- the Western Cooper Wet Gas JV (Drillsearch and Santos)
- the Deep Onshore Gas Project (Beach Energy and Chevron)
- the Hornet tight gas project (Senex).
WA gas industry comes ashore
Western Australia is well known as Australia’s leading oil and gas state, but its onshore oil and gas industry has long been overshadowed by WA’s large offshore fields.
However, a May 2013 US Energy Information Agency (EIA) report indicates that onshore WA could hold gas resources comparable with those in the state’s offshore basins.
The EIA says the Canning Basin, in the state’s north, could have up to 235.4 trillion cubic feet (tcf) of gas in its Goldwyer Shale formation alone. This would make the Canning a world class shale gas province. Exploration wells and geological studies indicate that the Canning’s Laurel formation also holds significant tight gas resources.
The Perth Basin’s potential shale gas resources are much smaller – 24.9tcf in the Carynginia shale and 8.1tcf in the Kockatea Shale, according to the EIA. But this is still substantial. The presence of the Dampier-Bunbury and Parmelia pipelines, and this region’s proximity to metropolitan Perth and the MidWest mining hub, make the basin’s gas fields attractive targets for development.
This region also has substantial gas resources of about 10tcf in classic sandstone and tight sandstone reservoirs. But further work needs to be done to identify how much of this can be recovered.
“…a May 2013 US Energy Information Agency (EIA) report indicates that onshore WA could hold gas resources comparable with those in the state’s offshore basins.”
Perth Basin gas production had been declining for several years, but the recently commissioned Empire Oil and Gas Red Gully project has reversed this trend and increasing activity in the region gives hope that a renaissance is coming.
Notable Perth Basin onshore gas appraisal and development projects include:
- Whicher Range tight gas (Whicher Range Energy)
- Warro tight gas (Latent Petroleum and Alcoa)
- Senecio tight gas (AWE)
- Woodada Deep shale gas (AWE)
- Arrowsmith shale gas (Norwest Energy and AWE)
Notable Canning Basin oil and gas exploration and appraisal projects include:
- Laurel Gas (Buru Energy and Mitsubishi)
- Ungani Oil (Buru Energy and Mitsubishi)
- Southern Canning shale gas and liquids (New Standard Energy, ConocoPhillips and PetroChina).
As well as stepping up exploration and appraisal activity, the WA onshore gas industry is also increasing its community engagement work. APPEA has joined with the WA Department for Mining and Petroleum and CSIRO to hold regional workshops to hear and respond to questions from the community.
Individual companies are also engaging with indigenous groups, farmers and pastoralists and are attending community meetings in their local areas to answer questions on development.