Australia's Federal Government Abates Oil Exploration Plans For Pyrenees Development

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Researched by Industrial Info Resources Australia (Perth, Australia)--BHP Billiton Limited's (ASX:BHP) (Melbourne, Australia) oil exploration plans for the $1.7 billion Pyrenees floating production vessel are being revaluated after the federal government's decision to protect the nearby Ningaloo Reef.

The greater area is currently producing about 60% of the nation's oil, but a bid by BHP Billiton partner Apache Corporation (NYSE:APA) (Houston, Texas) has been rejected. BHB Billiton had sought to look for petroleum in the World Heritage-listed Ningaloo Marine Park.

Australia's Federal Environmental Minister said Apache's plans were not conducive with World Heritage's position that exploration should not occur within protected areas. The decision may have implications for other firms operating in the industry-heavy region.

BHP Billiton and Apache are continuing with a separate application to begin seismic tests for oil just to the north of the Ningaloo Park for their 96,000-barrel-per-day Pyrenees joint venture. Apache Corp announced the first oil production from the Pyrenees development in 2010. The floating production, storage and offloading (FPSO) vessel is 42 kilometres north of Exmouth, Western Australia.

The Pyrenees development utilizes a subsea gathering system, which extracts oil from horizontal wells to the FPSO platform at a capacity of approximately 96,000 barrels of oil per day. The process uses water injection to enhance oil recovery and is estimated to operate for at least another 20 years. Apache owns 28.57% of the Pyrenees development, with operating company BHP Billiton owning the remaining interest.

Apache PVG (Perth, Australia),which is a subsidiary of Apache, is also processing oil from the Van Gogh oil field in the Exmouth Basin. Apache PVG has a 52.5% interest in the Van Gogh field, with INPEX Corporation (Tokyo, Japan) owning the remaining interest.

Apache is an independent oil and gas exploration and production company with operations in the U.S., Canada, the United Kingdom North Sea, Egypt, Argentina and Australia. Apache has been funding oil exploration and a range of development projects in Australia, including the Balnaves FPSO platform.

Plans to boost oil and gas exploration in New Zealand have been slowed with news that Apache is pulling out of a huge East Coast project in New Zealand's North Island. Apache has many opportunities across its global portfolio, and the company said the decision to withdraw from New Zealand was about priority for capital expenditures.

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