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Explorers pushing ahead

FALLING crude oil prices have had little, if any, effect on the intentions of players in Western Australia’s oil and gas industry.

Although the price of the benchmark West Texas Intermediate crude oil has been hovering either just above or just below $US20 per barrel in recent months, WA’s explorers are pressing ahead with plans to drill numerous exploration wells in the first half of this year. Indeed, the biggest bugbear in the industry at present is not that oil is selling for significantly less than it was this time last year, but that there are insufficient drilling rigs available to meet demand. This situation is causing delays to the spudding of wells, and is forcing companies to hold back from confirming the expected timing of many wells.

Despite this, the exploration industry could not have received a better indication of things to come than the discovery of a 70 million-barrel oilfield at the Cliff Head-1 well in the first week of the year.

WA’s largest oil company, Woodside Petroleum, intends to follow up its massive 2001 drilling program with at least 11 exploration wells in 2002, nine of which will be in Australian waters, and the majority of these off the north-west coast of WA. The company spudded its first well of the year, the Enfield-4 appraisal well on January 14.

Woodside’s international exploration efforts will again be focused on offshore Mauritania, where the company drilled two wells last year for one successful oil discovery, while further exploration is also intended in the Timor Sea.

Adelaide-based Santos Ltd plans to drill at least four wells in WA’s offshore Carnarvon Basin, and at this stage hopes to commence operations at the first of these, the Corowa Flank-1 exploration well in WA-264P, in the second week of February. The other three also will be drilled in the offshore Carnarvon Basin in WA-191P.

Corowa Flank-1 is intended to follow up Santos’ Corowa discovery, made in June last year, which flowed at more than 5,000 barrels of oil and 2.28 million cubic feet of gas per day.

The participants in the Harriet Joint Venture – Apache Energy, Tap Oil Ltd and Kufpec Australia – show no signs of stopping in their quest to flush out as many small to medium-sized oil targets as possible close to the Varanus Island processing facilities. Since July 2001 the joint venture has hit oil in four wells, and after spudding the Double Island-1 well this week, a further four exploration wells should be drilled by April. Work continues on upgrading the Joint Venture’s facilities at Varanus Island and, once this is completed, oil production will be boosted to 23,000 bpd.

In its own right, Tap Oil will seek to further develop its expertise as an operator by drilling its 33 per cent-owned Banjo-1 well in permit EP 397. This well will target a Triassic-era target at the relatively shallow depth of 970 metres.

While most drilling activity will occur in waters off the WA coast, Empire Oil and Gas and Amity Oil Ltd are hopeful of proving up hydrocarbon resources in onshore permit areas.

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