DEEP-WATER GIPPSLAND A New Frontier • Deep water structures revealed by contemporary seismic and high resolution aeromagnetics • Gippsland petroleum systems extend into new acreage • Potential play-fairways identified PESA News April/May 2000 VICTORIAN SUPPLEMENT MINISTER’S STATEMENT VICTORIAN SUPPLEMENT he discovery of Australia's first giant petroleum fields in Bass Strait in the 1960's had a profound effect on both the Victorian and national economies. Major petrochemical industries and many other manufacturing and Tprofessional businesses are located in the State, largely because of the proximity to the oil and gas reserves in offshore Gippsland. As major a population and infrastructure base, the State provides employees and support for these companies as well as markets for their products. The Australian corporate headquarters of Exxon-Mobil, BP-Amoco and Shell are all located in Melbourne, as well as smaller active oil companies. Victoria is well served by its growing gas infrastructure. With coal fired electricity, the state has benefited from an abundance of energy sources, providing the most competitive energy pricing to business and domestic consumers in the nation. The value of the resource extracted from the basins within Victoria and its Adjacent Area offshore exceeds $3 Billion per year. Although the State realises only a small portion of direct revenue from royalties, it is in the indirect benefit of having a local supply of oil and gas providing the ongoing relatively inexpensive energy that adds so much value to the State. The Brack's Government was elected in 1999 with a mandate to increase energy supply security in the wake of the Longford tragedy in 1998. The Essential Services Commission will be established to address supply security for essential services including gas, electricity, water and public transport. Intra- and Inter-state gas supply through the existing and future gas projects will not only augment supply security to Victoria and the adjacent states but is stimulating exploration interest. Victoria will also encourage the broadening of the gas supply base through providing information to attract and assist responsible exploration and interconnection with Victorian and interstate basins. This encouragement of oil and gas exploration is the prime focus of this publication. As well as providing information relating to future releases of acreage under consideration, it provides a summary of activities relevant to the Petroleum sector by my Department and some of the companies already active in the area. I believe that both existing and future investors will be informed and retain it for future use. Candy Broad Minister for Energy and Resources, Minister for Ports and Minister Assisting in State Development CONTENTS I MPV Division Structure 1 I Major Projects Demonstrate Confidence In Victorian Market - Geoff Collins 2 I Exploration Activities In Victoria - Maher Megallaa 3-6 Strike Oil - Well Positioned In Emerging Victorian Gas Province Origin Energy - Explorating, Producing And Developing In The Otway Basin Woodside - Gears Up For Eastern Australia I Proposed 2000 Release Of Exploration Areas - Dr Mike Woollands 7 I Gippsland Basin: Potential Fields From Potential Fields - David Wong, David Moore & Dr Tom Bernecker 8-10 I Otway Basin Update - Andrew Constantine & David Moore 11 I Petroleum Resources & Production - 1999 - Kourosh Mehin 12-13 Esso - Opportunity Generation In Mature Fields - Bass Straits I Petroleum Information Update - Bob Harms 14 I MPV Reports Listing 15 I List Of Tenements 16 I Tenements And Pipelines Map IBC I Composite Deep-water Seismic Line OBC EGPL VICTORIAN SUPPLEMENT MAJOR PROJECTS DEMONSTRATE CONFIDENCE IN VICTORIAN MARKET BY GEOFF COLLINS, MANAGER PETROLEUM FACILITATION Construction commenced in NSW in August 2000 with first gas in mid 2002. The field, 1999 and in Victoria in January 2000. First which is about 10 km offshore in 60 m of gas is expected in September 2000. Initially, water, is estimated to have over 300 PJ of sales the pipeline will have a 60 PJ capacity, with gas. It is proposed that production is through up to 100 PJ planned as demand grows. two subsea completions to a processing plant Already a deal has been signed to supply 20 onshore. It is expected that gas would be Geoff Collins PJ to BHP steelworks in Port Kembla and Sithe piped through the South West pipeline which Energy's Smithfield cogeneration plant. Duke joins the Melbourne network at Lara. Major gas projects commencing in Victoria also has agreements to supply Energy will continue the pattern of the last few years Australia, Citipower and Integral Energy who Together, these projects indicate the breadth in taking advantage of the de-regulated will retail in the Sydney market. of the industry in Victoria. From production environment for gas marketing. Three to transmission to storage, they all have projects illustrate different segments of the The BHPP-Santos Minerva project is benefited from the de-regulated market that market. progressing to a decision on its future. The exists in Victoria and demonstrate a environmental work on determining an agreed confidence in the future. The Western Underground Gas Storage in route across the highly touristed Port western Victoria will use the nearly depleted Campbell National Park has been completed onshore Iona gasfield for winter gas and accepted. The project team put in production and summer storage. This takes outstanding effort in ensuring that broad NEW ONSHORE PETROLEUM advantage of the nearly two to one difference consultation and significant environmental ACT NOW IN OPERATION in winter and summer gas demand and the study led to an outcome that was acceptable de-regulation in prices. The project is owned to the majority of those affected. BHPP's plan The Petroleum Act 1998 came into effect by TXU, a Dallas based company, who also is for work to commence on the project late in on 1 December 1998. The Act brings own the Victorian electricity distributor and petroleum exploration and development retailer, Eastern Energy. The production administration into line with modern phase of the gas plant was completed in June, practice in Australia. The principal with first gas into the South West pipeline on changes are: 4th July 1999. In this initial phase, up to 100 TJ/day was supplied to the Melbourne gas • Exploration permits are for a five year market by producing gas from the Iona field, term with a single five year renewal with blended with low CO2 gas from the Mylor 50% relinquishment, bringing them into and Fenton Creek fields owned by Santos. line with other Australian legislation The injection phase of plant construction was • Introduction of Retention Leases to give completed March 2000, in time to allow the security to currently non-economic Iona reservoir to be filled prior to winter discoveries 2000. The storage capacity of the facility will be 10 PJ. Gas will be purchased from either • Production Licences to be for ‘life of Otway, Gippsland or Cooper Basin producers field’ The Western Underground Gas Storage project and injected over about 200 days. It will be is a vital link in the strategy to improve the • Recognition of gas storage depleted over about 80 days during winter, security of Victoria’s gas supply. with a maximum capacity of 200 TJ/day. It is • Legislated transparency in the acreage intended that, as demand grows, additional award process depleted fields in the area will be converted • Flexibility in royalty for marginal fields to gas storage. The project makes use of the South West pipeline, completed in 1999, to • Introduction of Operation Plans for transport gas to and from Melbourne. operations, a move away from prescriptive requirements The Eastern Gas Pipeline runs from the Longford gas plant in Gippsland, to Sydney • Clarification of access to land. Planning permit no longer required for via Canberra. This $450 million, 795 km exploration operations pipeline will provide opportunities along its length. These include reticulated natural gas • Improved access to data, in line with the for communities, power generation and ties PSLA to production from northwestern fields in the offshore Gippsland Basin. The project is Notice has been provided to onshore owned by Duke Energy, a North Carolina operators as to how the changes will affect based company that also owns the them. If you have any questions about the Queensland pipeline, two power stations in legislation, please contact, in the first WA, and is undertaking a feasibility study Bernie Fablish (left) and Mick Gander (right) instance, Rob King at Ph 9412 5069 or on a Longford to Tasmania pipeline. Inspect trenching and stringing near Nowra. email [email protected] 2 PESA News April/May 2000 EXPLORATION IN VICTORIA VICTORIAN SUPPLEMENT EXPLORATION ACTIVITIES IN VICTORIA BY MAHER MEGALLAA, MANAGER ACREAGE RELEASE Maher Megallaa VIMP 2001 Promoting Exploration In 1998-99, MPV, through a collaborative joint venture with Seismic Australia (SA), acquired and processed 981 line km of seismic in the deep-water region of the Gippsland Basin (GDW99 Survey) under the umbrella of VIMP 2001. This year, the petroleum component of the VIMP 2001 included the reprocessing of 4271 line km distributed as follows: - • 2865 km from selected AGSO [BMR 1987] deep-water and relinquished VIC/P24 survey lines. Its objective is to 1) assist in evaluation of two areas to be released in May 2000 by the Joint Gippsland Basin reprocessed seismic grid (2865 km) available to industry on a non-exclusive Authority (see opposite map), and basis. 2) provide contemporary infill data for the GDW99 Survey and for the released shelf Gippsland Basin seismic through a joint Perth: area. The project was granted to venture with MPV. Veritas-DGC is under- Steve Jeffrey - Australian Seismic Brokers Australian Seismic Brokers (ASB) in a joint taking the reprocessing at their Perth data Ph 08 9479 5900 venture with MPV on a non-exclusive processing center.