Oil giant ConocoPhillips said on Monday it had struck gas off the coast of southeastern Australia after beginning its maiden exploration drilling on November 1. Wireline logs indicated gas columns across two targets off the coast of Victoria state.
Work is set to continue for two more weeks before moving to a second exploration well, designed to prove the existence of a large gas resource that could supply Australia’s east coast market.
The company’s country president, Jan-Arne Johansen, called the discovery encouraging and said it was the first in the region in four years. "We look forward to continuing drilling our second exploration well in December," he said in a statement.
The US company shares the Otway Basin permit with Australian junior 3D Energi and Korea National Oil Company, which joined the venture in May. Conoco first joined 3D in 2019, around the time it was divesting its interest in the Darwin LNG project and associated offshore gas fields.
Conoco said operations at Essington-1 are ongoing and once it is plugged and abandoned it will move to the second well of the exploration campaign. Six wells are planned across two permits, with an option for four more.
The partners hope to discover a commercial-sized source of new supply for Australia’s east coast, where material shortages are forecast in the late 2020s. It also operates Australia Pacific LNG in Queensland which has been threatened with export controls by Canberra if domestic needs are not met. Shares in 3D rose almost 35 per cent by mid-session to AU$0.16 ($0.10).
(Reporting by Helen Clark; Editing by Stephen Coates)