Southeastern Australia's Otway basin, so often a Cinderella to the riches of the Gippsland basin farther east, is finally emerging as belle of the petroleum ball.
The Otway basin straddles on and offshore western Victoria and southeastern South Australia plus offshore Tasmania. The basin's fortunes have improved lately in the number and size of discoveries.
The Origin Energy Ltd. group's Thylacine 1 find revealed in mid-May is the latest in a string of Otway discoveries during the last five months that indicate the region is indeed alive and well and still bursting with potential.
Earlier discoveries in the 1970s, 1980s and 1990s like the smaller onshore North Paaratte, Katnook, and Ladbroke Grove, and offshore Minerva and La Bella fields have pointed to this promise, but they came amid a far greater number of expensive dry holes. It now seems that explorers may have found the basin's "signature."
Thylacine, an offshore discovery ironically named after the extinct Tasmanian tiger, followed five straight gas successes by the Santos Ltd. group onshore Victoria since the beginning of the year to add to its three fields already on production.
The activity has prompted two proposals to build pipelines to supply Victoria and South Australia. It has also spawned a new company, Essential Petroleum Resources NL, plus a brave proposal to revisit the enigmatic gas find at the Troas prospect off South Australia (OGJ Online, Aug. 21, 2000).
Thylacine 1, on Tasmanian Permit T/30P about 70 km off Victoria in 100 m of water, is already regarded as one of the most significant finds since the North West Shelf. Such early comparisons are always dangerous; nevertheless, 3D seismic data delineate the prospect.
Preliminary volumetric estimates indicate that gas reserves are likely to exceed 600 bcf and may exceed 1 tcf. The 281-m gross gas column is in Cretaceous age Waarre sandstone, a highly productive reservoir that contains gas in most of the region's smaller fields.
From Thylacine the Origin group moved 15 km north. Geographe 1 in 85 m of water on Vic/P43 found gas at 1,831 m, 1896 m, and 2,015 m. The gas contained 6-8% inerts, but Origin called the find significant. The well may have tapped 500 bcf of gas in place on the southerly of two culminations, and drilling on the northern culmination could increase gas in place beyond 1 tcf, Origin said.
Santos-Beach successes
The Santos group (Santos 90% and Beach Petroleum NL, Adelaide, 10%) has made four of its five recent discoveries at onshore Victoria permit PEP154. The fifth is on Santos 100%-owned PEP153.
All are near the town of Port Campbell and close to the original North Paaratte-Wallaby Creek-Brumby gas fields that Beach discovered in 1979-80.
After moving into the area several years ago Santos found gas at Penryn, Mylor, and Fenton during 1999-2000 and brought them on stream via its newly constructed Heytesbury gas processing facility. This year's gas finds began with McIntee in February, closely followed by Tregony (Santos 100%) in March, Croft in April, and Lavers and Naylor in May.
All contain gas in the Waarre sandstone reservoir, and the most recent (Naylor), with 30 m of net pay, is deemed the most significant so far with a potential production of 9.3 MMcfd. As with the offshore program, the use of 3D seismic technology is seen as a major factor in the group's success.
Equally important in terms of viability is the recent development of more pipe- line between Melbourne and the western Victoria town of Warrnambool that has markedly improved chances for rapid commercialization of new onshore Otway gas finds, even small ones.
Perhaps more significant in the light of this year's successes are the proposals to link the Victoria Otway basin finds via pipeline to markets in South Australia and Adelaide in particular.
Supplying South Australia
For some time the South Australian government has wanted to ensure a long-term security of supply of gas to the state and not rely solely on the existing pipeline from the Cooper basin. It short-listed six utilities with proposals to bring in gas supplies. Those included a connection with Timor Sea fields off northern Australia and several ideas tapping sources closer to home.
One of these was Duke Energy Corp.'s plan to build an $A250 million, 670-km line from BHP Petroleum Pty. Ltd.'s undeveloped Minerva gas field off Victoria, taking in production from other Otway discoveries on the way. Duke said at the time that such a line would need demand of 28 bcf/year, but that the plan would be to build in a total capacity of 56 bcf/year. Duke wants to secure commitments from South Australian customers before proceeding.
A rival plan announced in May involved Australian National Power (ANP) and Origin Energy, Sydney, who have established a joint venture company called South East Australia Gas Pty. Ltd. to build a 630-km line between the Port Campbell area in Victoria and Adelaide.
At an estimated cost of $A200 million, the project is expected to add to the region's pipeline infrastructure and meet the South Australian security of supply concerns. Both ANP and Origin are retailers and users of natural gas in their own rights. They believe there is another potential market in a proposed new magnesium smelter to be built near Port Pirie on Spencer Gulf, north of Adelaide.
It is doubtful that both projects, timed for completion about 2004, will be needed together, at least in the short term, but it will only take one to increase the renewed Otway exploration effort.
Otway players
Further evidence of the growing geological confidence in the region is the successful float in February this year of Essential Petroleum Resources (EPR).
Directors of Essential, Melbourne, have had long working experience in the Otway basin and believe that the application of new seismic technology is finally finding the fields they have long felt were present. EPR has interests in five permits operated by Origin Energy.
Another company keen to step up its Otway effort is Lakes Oil NL, Melbourne. The company has interests in several permits, including 40% of onshore PEL 57 in South Australia that contains part of a prospect called McNamara Park. The prospect straddles the boundary with PEL 72, and Lakes will earn a 7.5% direct interest in PEL 72 by contributing to the currently drilling McNamara Park 1 well operated by Origin Energy.
In a much more audacious move Lakes has moved to a 100% interest in offshore South Australian permit EPP24, which contains the teasing Troas prospect. Troas was drilled in 1992 by then operator BHP Petroleum Pty. Ltd. and found gas that was never tested on the grounds that it was unlikely to be commercial.
Lakes has long disputed this and believes there may be reserves of up to 600 bcf, a commercial prospect in the light of the current Otway pipeline plans. The company is currently mustering its finances and sounding out joint venture interest to redrill the Troas prospect early in 2002.
In a way Troas typifies the Otway story. If Lakes manages to turn Troas into a commercial discovery Cinderella will undoubtedly be belle of the ball.
Meanwhile in early June Victoria awarded EPR permit VIC/P46 to explore Area V00-1 offshore in the Otway basin.
