Petroleum exploration in South Australia Elinor Alexander Director - - PowerPoint PPT Presentation

www.petroleum.statedevelopment.sa.gov.au

Petroleum exploration in South Australia Elinor Alexander

Director Geology and Exploration Branch DSD Energy Resources Division Global Maintenance USG & SACOME Conference and Trade Expo,18 August 2016, Pt Pirie

http://www.rystadenergy.com/AboutUs/NewsCenter/PressReleases/global-liquids-supply-cost-curve 0 200 400 600 800 1000 1200 100 80 60 40 20

29 44 59 59 68 67 65 62 63 79 79 79 Weighted average

break-even @ real discount rate of 7.5% Total remaining recoverable liquid resources (billions barrel) Rystad Energy’s Global liquid petroleum cost curve US$/bbl Brent Producing fields Offsh Shelf Deep waterOnsh Russia Extra Heavy Oil Ultra Deep Water

North Amer. Shale

Oil Sands

60% confidence in break-even price for each category

Onsh Mid. East Onsh Rest of World Remaining resources in all categories as of 2015 Non-producing fields A$25 to 35 = US$18 to 25 per bbl oil lifting cost range Cooper Basin

Crude oil prices ($/bbl) – BP 2015 SA Oil and gas production

Setting the Scene

The long-term outlook remains very positive for SA’s minerals and petroleum sectors – SA has a rich mineral and petroleum resource endowment and long-life resources. SA offers a supportive investment framework, trusted regulation, infrastructure and easy access to data.

Cooper Basin Flooding event http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/oil/oil-prices.html

State of play in SA

Oil:

• Western Cooper flank oil play
• New plays in Otway Basin
• Lightly explored frontier basins.

Huge potential for gas:

• Ongoing Cooper production. Infill drilling, pin point

fracs etc.

• deep coal, tight gas, composite plays
• coal gasification plays – e.g. Leigh Creek
• New plays, undrilled prospects in Cooper, Otway basins.

Offshore Bight Basin:

• Prospective areas now under licence or application.
• Commonwealth waters are regulated by NOPTA and
• NOPSEMA. SA part of the Joint Authority.
• Opportunities for onshore developments and

engagement with service and supply sector through ICN.

Cooper Basin Otway Basin

Leigh Creek

Officer Basin Bight Basin Eromanga Basin

Cooper Basin

Petroleum pipeline

Gas Gas and liquids Oil

Discoveries 2002 – 2015

Oil Gas Resource play

Petroleum tenements

Exploration licence (PEL) Exploration licence application (PELA) Production licence (PPL) Retention licence (PRL)

Company news: 28 July - Beach - FY17 capital expenditure expected to be ~$180 – $200 million, ~2/3 directed to Western Flank oil and gas with drilling up to 16 exploration wells. 27 July Senex - FY17 capital expenditure ~$60 - $70 million, potential for more if sustained oil price recovery. At least 6 wells - western flank secondary recovery and Murta tight oil. Senex + Origin to spend $25-45 m on unconventional gas exploration – EPTs on 2 FY16 gas exploration wells + 1 high-impact gas exploration well (northern JV area) Q2 FY17. 15 July Strike announced all 4 Klebb wells on production. Santos indicate that 2017 planning is yet to be finalised. Discovery Energy - about to commence a 3D seismic survey in the Cooper region

COOPER BASIN PLAYS

Oil

The Western Flank has now been a source of many oil discoveries utilising 3D seismic and generates high margin cash flows with a short pay back period of < 1 year.

Gas

Significant potential for gas in unconventional reservoir plays, infill drilling in established fields and some parts of the basin remain

• nly lightly

explored

Leigh Creek – Telford Basin

PEL 650 – granted to ARP TriEnergy (Leigh Creek Energy) Nov 2015.

Exploration and evaluation program underway. Baseline environmental data (e.g. water and groundwater sampling and monitoring wells) will inform the Environmental Impact Report required under the Petroleum and Geothermal Energy Act 2000. “Leigh Creek Energy will need to pass rigorous environmental impact assessments

• verseen by expert scientists if this project is to go ahead. We have a very effective

regulatory framework in South Australia and the merits of the Leigh Creek Energy project will be assessed against that framework…” Mineral Resources Minister Tom Koutsantonis MP (The Advertiser 29/4/2016)

LICENCE GRANTED ON GROUND ACTIVITY PROPOSED BY OPERATOR ENVIRONMENTAL ASSESSMENT (EIR, SEO) LOCATION SPECIFIC ACTIVITY NOTIFICATION & APPROVAL

WORLD CLASS REGULATION FOR THE PETROLEUM INDUSTRY 2015 Fraser Institute Global Petroleum Survey – 1st in Oceania, 12th in the world and topped the world for Fiscal Terms. In 2009, the Australian Productivity Commission identified SA’s lead agency or ‘one-stop-shop’ approach and straightforward regulatory framework as a benchmark that other Australian jurisdictions should follow.

ONSHORE PETROLEUM REGULATION

Source: DSD

Government Consultation Public Consultation Environmental Impact Study

Licence applicant’s financial and technical capacity, 5 year work program (wells, seismic, surveys etc.), Native title and land access. 12,500+ notices of entry for

• perations issued since

September 2000 without a single person or entity pursuing litigation Environmental Impact Report – identify all risks to the environment and how they will be managed. EIR provides basis for Statement of Environmental Objectives which sets:

• environmental objectives,
• how objectives will be achieved, and
• assessment criteria.

 Exploration offshore SA commenced 50 years ago.  24 wells drilled, ~150,000 km 2D & 45,000 sqkm 3D seismic acquired.

OFFSHORE BIGHT BASIN

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Copies of The facts about offshore oil and gas exploration in South Australia available here or via DSD website:

http://petroleum.statedevelopment.sa.gov.au/latest_updates/the_facts_- _about_offshore_oil_and_gas_in_south_australia.

150 km

 Chevron, BP, Statoil, Murphy and Santos and Bight Petroleum have guaranteed to spend a total ~$1.2bn from 2011-2018, with 9 wells + acquisition

• f 40,620 sqkm 3D seismic.

 $1.1bn non-guaranteed exploration from 2018-2021 could include 10 wells +8970 sqkm 3D seismic - depending on initial exploration results.  Commonwealth waters are regulated by NOPTA and NOPSEMA. SA is part of the Joint Authority – but has no day-to-day regulatory role.

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ROADMAP FOR OIL AND GAS IN SOUTH AUSTRALIA

THE ROUNDTABLE FOR OIL AND GAS IN SA Energy Resources Division formed the Roundtable for Oil and Gas Projects in SA in 2010. It is a Roundtable of industry; governments; peak bodies; aboriginal people; research institutions & a few individuals. Now >1000 members. Working groups established to address: 1. Regional training hub.

• 2. Supply hubs, roads & airstrips.
• 3. Water use in Cooper-Eromanga.
• 4. Transport red tape reduction.
• 5. Green House Gas detection.
• 6. Supplier forum to boost local content.
• 7. Gaseous fuels for transport & heavy machinery.
• 8. Sharing Information.

NEW MEMBERS ARE WELCOME: DSD.Petroleum@sa.gov.au ROADMAP FOR UNCONVENTIONAL GAS PROJECTS IN SA Published in 2012 to highlights opportunities to develop SA’s gas resources in a sustainable way. 125 recommendations - 93 have been implemented

• r are underway.

Work started on a new edition to be launched in late 2017.

www.petroleum.statedevelopment.sa.gov.au