THE State Government’s onshore Otway Basin release for exploration in the South East will cover 1734 square kilometres and could open the way to fracture stimulation, according to a high-level document for prospective energy companies.
Bids via a competitive tender process close in late September, which will see expansive areas of the South East opened up to potential gas mining activities.
According to the report for the tender process, 14 petroleum wells have already been drilled in this area.
The government has also announced that royalties “may” eventuate from the OT2017-A acreage release block, which will share part of the government’s take of royalties.
The bidding process will include the need for companies to undertake an environmental impact report in “consultation” with all potentially affected people, enterprises and organisations.
This must address the potential impacts on the social, natural and economic environments, including public health.
“If a proposed activity regulated pursuant to the Petroleum and Geothermal Energy Act 2000 cannot demonstrate compliance with the objectives for the protection of social, natural and economic environments, then approval for this activity will not be granted,” the document states.
While the document states fracture stimulation has been a “routine” safe process in the Cooper Basin for decades, there have been no fracture stimulation projects proposed in the South East in the Otway Basin.
“When and if a proposal for fracture stimulation in the Otway Basin arises, a location-specific and activity specific environmental impact report will need to be prepared to inform a pertinent statement of environment report and both of these regulatory instruments will be the subject of public consultation as described above.”
The report said the Otway Basin was only modestly explored with high potential for further discoveries.
“Oil discoveries are limited, but there is considerable potential for significant oil discoveries in the future,” the report states.
The OT2017-A block is being offered at a time when the entire south eastern Australian gas market is accessible via the SEA GAS pipeline.
The document said the existing infrastructure was a key factor in reducing the uncertainty for the economic prospects of gas plays in the Otway Basin.
“The entire extent of the Otway Basin in South Australia has been held within petroleum licences (almost continuously) for decades,” according to the government document.
“Petroleum exploration in the region dates back to the 1880s.
“Exploration and production of gas and oil has been conducted for over 100 years in the South East of the South Australian extent of the Otway Basin.”
This includes more than 101 petroleum wells drilled since 1915 and gas production through the Katnook gas processing facility between 1991 and 2011.
Furthermore, 10,495 line kilometres of two-dimensional (2D) geophysical surveys and 5262km2 of three-dimensional (3D) geophysical surveys have been acquired in the South East.
“Despite exploration, development and production activities being located in and adjacent to the highly valued Coonawarra wine growing region of the South East, potentially affected people, enterprises and organisations have been demonstrably able to continue their various agricultural activities in compatible, contemporaneous coexistence with the petroleum activities.”
The document stated outcomes have been demonstrably safe and without significant, perceptible, associated, negative impacts on the environment, enterprises or the health and safety of people.
“In short, the sustainability of multiple land use, including access for petroleum exploration, development and production is demonstrable.”
The successful bidder will be required to meet South Australia’s environmental requirements before being approved to conduct exploration activity on the block.
Winning bidders will be selected on the basis of the total five-year work program bid.
In addition, benefits of introduction of new explorers into the area may be taken into account.
