Gurdip Singh, Contributing Editor
Even though rig availability remains tight and rig day rates are increasing, oil and gas prospecting off Australia’s Northern Territory continues unabated, with every well drilled last year encountering hydrocarbons at one or more levels.
“This is the highest number of discoveries in a given year in Northern Territory,” says Moshtak Othman, petroleum resource manager at the Department of Primary Industry, Fisheries and Mines (DPIFM) of Northern Territory.
Rising rig day rates have increased the cost of drilling considerably. The six offshore exploration wells drilled in 2006 cost A$214.9 million ($176.34 million). In 2005, eight offshore wells were drilled at a cost of A$137 million ($112.42 million), Moshtak says.
Rising costs are not having a negative impact on work programs in the region.
So far, 2007 looks like a continuation of 2006, Othman says. Many companies working in waters off the Northern Territory already have fulfilled exploration and appraisal well commitments for the year, while the others are on schedule to meet their obligations.
Three explorations were completed in 1Q 2007, says Othman, who monitors the Territory’s upstream sector daily. “More wells and petroleum activities are planned, and we hope the diligent hard work will lead to more discoveries for the benefit of Territorians.”
Ongoing projects
A number of sizable projects are under way offshore the Northern Territory.
On the field development front, the Montara oil and gas discovery in production license AC/L7 in the southern Timor Sea, 650 km (404 mi) west of Darwin, is expected to begin production next year. The development plan for Montara involves nine producing wells, of which six will be drilled in Phase 1, scheduled for completion in 3Q 2008, and three will be drilled in Phase 2, to be completed in 3Q 2009.
The recently discovered Swift/Swallow and Skua fields are within tie-back range to Montara, and their estimated 37 MMbbl of oil are considerably more commercial in the present oil price environment, Othman says.
Operator Coogee Resources Ltd. is considering an FPSO for joint development. The company also has committed to a multi-million-dollar front-end engineering and design study for a methanol FPSO (MFPSO) for the Cash Maple development to the north.
Among other developments, Eni Australia is developing the Blacktip gas field in the southeastern Bonaparte basin, about 350 km (217 mi) southeast of Montara and 300 km (186 mi) southwest of Darwin. Gas is to be transported to Darwin through the proposed Bonaparte gas pipeline.
In the Ashmore Cartier region, AED Oil Ltd. is set to begin production from the first phase development of the Puffin field in 1Q 2008. The FPSO is being commissioned to start at the Puffin North East 1 and 2 reservoirs.
In the meantime, AED is assessing a plan to develop the Puffin South West discovery, aiming for output in the first half of 2008 in production license AC/L6. The neighboring Talbot field, which AED acquired in May this year from Apache Northwest Pty. Ltd., is being assessed as the next development. Combined, the Puffin and Talbot fields hold about 100 MMbbl of oil.
Another major player in the Northern Territory is Nexus Energy Ltd. which expects to make a final investment decision on the development of Crux field in permit AC/P23 just south of Montara by 2Q 2008. Crux holds an estimated 1.3 tcf of gas, with 65 MMbbl of recoverable gas condensate. Initially, Crux will be developed as a gas recycling project, using an FPSO. Condensate production is expected to plateau at 16,000 b/d.
Nexus is close to securing an FPSO and has planned further appraisal drilling in Crux for 1Q 2008. Crux is expected to produce 900 MMcf/d of gas. Nexus says 31,500 b/d of condensate could be stripped from the gas, with the dry gas being re-injected into the reservoir.
The Crux field lies 100 km (62.14 miles) northeast of another Nexus owned permit, WA-377-P, which contains the Echuca Shoals gas discovery now being appraised as a gas/condensate producer.
Diamond Offshore’sOcean Epoch semisubmersible recently completed the Fossetmaker-1 well, appraising gas prospects and evaluating the eastern extension of the Echuca Shoals in WA-377-P permit area. Nexus has assessed the potential of 4 tcf of gas in place with associated condensate and plans to drill another well.
Nexus and new farm-in partner Shell are reassessing the potential of Echuca Shoals as a significant LNG project. The nearby Ichthys gas field also is being considered for development as an LNG project by operator Inpex Corp. of Japan. Inpex is aiming for LNG production in 2012.
Meanwhile, Woodside is appraising its small oil discoveries on the Jahal and Kuda Tasi fields in the Timor Sea Joint Petroleum Development Area. Woodside is considering development options that include a tieback to the Northern Endeavour FPSO on the Laminaria-Corallina fields.
