2010 PESA industry review–exploration

Abstract

An uncertain global economy, offset by strong commodity prices, provided the backdrop to a subdued yet solid level of exploration activity in 2010. The major loci of activity in the Australian oil and gas industry were the Exmouth Plateau, where exploration for conventional gas in support of LNG projects was the primary driver, and the Bowen/Surat Basin, where coal seam gas (CSG) for LNG was the main target. Onshore permit awards dominated new licensing in 2010, with 31 exploration permits awarded over an area of 190,000 km2. The majority of these permits are focused on unconventional gas exploration. Conversely only 14 exploration permits (30,000 km) were awarded offshore, all in northwest Australia. This historically low level can be related to an already extensive coverage of existing permits in the offshore petroleum provinces and delays in the announcement of acreage awards from the 2009(II) acreage release. Twenty-nine 2D seismic surveys were started in 2010, with three still active at the end of the year. Once completed, the 2010 surveys will total nearly 37,000 km of data, with 76% offshore. Twenty-one 3D seismic surveys commenced in 2010, with six still active at year end. The 2010 surveys will ultimately comprise approximately 29,000 km2 of data, with 95% offshore. Northwest Australia dominated seismic activities. Exploration drilling for conventional hydrocarbon resources was relatively subdued in 2010, with 63 wells spudded, compared to 92 wells in 2008 and 74 in 2009. Of the 49 wildcat wells where results are known, 51% reported hydrocarbon discoveries. This was a little less than the 57% in 2009 and up on the 39% in 2008. The discoveries were distributed across most of the traditional petroleum provinces. High levels of CSG drilling continued in 2010, exceeding 2008 activity but less than that of 2009. At least 648 CSG wells were spudded in 2010, mostly in the new heartland plays of the Bowen/Surat, Gunnedah and Clarence-Moreton basins. This compares with more than 600 CSG wells drilled in 2008 and more than 900 in 2009. The first dedicated Australian shale gas exploration drilling took place in 2010. Emerging shale plays in the Cooper and Perth basins were tested.