Oil & Gas Exploration Increases in North Australia

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Researched by Industrial Info Resources (Perth, Australia)--Oil and gas exploration efforts in northern Australia are set to grow with increased exploration budgets for two joint ventures, an exploration and production company being awarded an exploration permit, and one of the nation's largest companies continuing to development their production infrastructure.

Central Petroleum Limited (ASX:CTP) (Toowong, Australia) has announced plans to increase exploration spending by 600% over last year's efforts in the company's joint venture projects. The Amadeus joint venture with Santos Limited (ASX:STO) (Adelaide, Australia) will spend $US 26 million ($AU 30 million) conducting seismic surveys across a 930-mile (1,500-kilometer) area with the intent of identifying suitable drilling prospects. The Amadeus Basin covers approximately 65,600 square miles (170,000 square kilometers), mostly within the southern part of Northern Territory, but also extending into Western Australia.

The basin contains the Mereenie Oil Field near Kings Canyon, which has been producing oil since 1984 and gas since 1987. Santos currently owns 100% of the Mereenie field. The companies 2013 eight-well drilling and appraisal program is currently under way, and dependent on the outcome, Santos will consider drilling further wells in the Mereenie field.

Central Petroleum is also planning to spend $US 60 million ($AU 66 million) as part of the Southern Georgina joint venture with Total SA (NYSE:TOT) (Paris, France) over the next 18 months. The Georgina Basin 127,000 square miles (330,000 square kilometers) and extends from the central part of the Northern Territory into Queensland. The basin is believed to be one of the least explored and developed hydrocarbon and onshore sedimentary basins in the world.

Empire Energy (ASX:EEG) (Sydney, Australia) also has a busy work schedule in Northern Australia, having been granted an unconventional and conventional oil and gas exploration permit in the MacArthur Basin, which also lies mainly in the Northern Territory, but extends over the border into Queensland. The permit covers an initial period of five years, during which time Empire Energy will be required to meet a number of criteria, including geological and geophysical studies, seismic studies, drilling of test wells and drilling of horizontal wells.

Should this exploration work be successful, it is not clear yet which markets will be supplied. The Amadeus Gas Pipeline, owned and operated by APA Group (ASX:APA) (Sydney, Australia) already connects the gas fields in the southern part of the Northern Territory with Darwin in the north. Another option is to construct a pipeline to link the gas fields to the South West Queensland Gas Pipeline, also owned by APA Group. This would allow for the gas to be supplied to either the domestic market or the Liquefied Natural Gas Plants on Curtis Island for export to foreign markets.

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