Esso, BHP Billiton to commence new Bass Strait drilling program

Nov. 11, 2003
In what is expected to be the largest combined E&P drilling program in the Gippsland basin in the Bass Strait off Victoria since the 1980s, Esso Australia Resources Pty. Ltd. and its 50:50 joint venture partner BHP Billiton Ltd. are preparing to locate and extract oil and natural gas from smaller fields that show potential and that are near existing infrastructure in the mature basin (see map OGJ, Nov. 13, 2000, p. 36).

By OGJ editors

HOUSTON, Nov. 11 -- In what is expected to be the largest combined E&P drilling program in the Gippsland basin in the Bass Strait off Victoria since the 1980s, Esso Australia Resources Pty. Ltd. and its 50:50 joint venture partner BHP Billiton Ltd. are preparing to locate and extract oil and natural gas from smaller fields that show potential and that are near existing infrastructure in the mature basin (see map OGJ, Nov. 13, 2000, p. 36).

The JV is negotiating to contract a drilling rig for a long-term drilling program to commence in February 2004. The rig will be capable of drilling wells from either existing platforms or in new locations. The program may extend into 2005, depending on the success of initial wells, the JV said.

The planned drilling program is based upon data acquired in 2002 during the largest proprietary 3D seismic survey ever undertaken in Australia. The objectives of the survey, which covered more than 3,900 sq km, were "to identify new exploration prospects, provide data to better plan for the depletion of producing fields, and to assist in bringing small, undeveloped discoveries into production." All the wells will be located within existing production license areas, and will target both crude oil and natural gas, the JV said.

"We believe there are new oil and gas resources still to be found in the Gippsland basin," said Doug Schwebel, Esso Australia exploration director. "From an exploration viewpoint, the program is all about finding new potential in a mature basin."

Steve Bell, BHP Billiton Petroleum president of exploration and development, added: "In particular, the joint venture will be looking to leverage its ability to commercialize smaller resources due to their proximity to existing infrastructure. This will also help extend the productive life span of the existing platforms and pipelines."

In the 34 years since the Esso-BHP Gippsland JV began production in October 1969, more than 3.5 billion bbl of oil and 5 tcf of gas have been produced. Current production is 140,000 b/d of crude and 570 MMcfd of gas.

Over the past 5 years, overall capital expenditures associated with the JV's Gippsland operations, including onshore facilities, have exceeded $400 million/year (Aust.), making it one of Australia's largest ongoing oil and gas investment programs.