The Australian oil industry recently came by a major breakthrough – a well with more potential than any other discovery made in over two decades. The find was on Australia’s Northwest Shelf, in the Dorado-1 well, and came shortly after recent discoveries of gas and condensate nearby.
The Discovery Stands Out
The discoveries were made by Australia’s Carnarvon Petroleum and Quadrant Energy, two drilling companies that possess drilling permits in the Canning Basin region. They believed, in the early stages of the discovery, that the column discovered was no more than 80 m thick. With more time to study this new resource, however, it has come to light that this was a significant underestimation. The richness of the Caley Member of the Dorado-1 seam is now estimated at 132 m in thickness.
More Specifics on the Significance of the Find
Australia hasn’t had much luck drilling for new reserves in the past four years. The new discovery, however, was made at a depth of 96 m with net pay at close to 80 m. This is an indication of oil that is of quality high enough for ready commercial exploitation.
Experts expect that the new well holds 150 million barrels of oil of quality high enough to overshadow other high-performing wells such as Phoenix South and Roc Well. While those fields produce a mixture of gas and related hydrocarbons, the Caley Member, the new find, is mostly light oil.
Carnavon being a small company, this is particularly good news, because oil tends to be cheaper to bring to market than gas. It can be pumped and sold with minimal investment. With gas, Carnavon would have had to build a 200-kilometer-long pipeline to tie the new well to existing infrastructure, and to then look up new sales contracts, all before they could have pumped. The company, which supplies 20% of the domestic market for gas in Western Australia, doesn’t see a ready market for more gas. Oil however, is a different matter.
There May Be More to Come
There may be more oil waiting to be discovered elsewhere over the rest of this basin of 22,000 square kilometers, an area that matches Carnarvon Basin, an oil-rich region that began producing in the 60s. If the Caley Member shows as much promise, it would be a huge boost to Australia’s oil production capabilities. Carnarvon is already drilling a new well in Phoenix South-3 to better estimate the potential of the find. This new discovery, meanwhile, has already added a billion dollars of value to drilling permit holders Quadrant and Carnavon.
Taking the Current Discovery to Market
According to Sigma Drilling Technologies, maker of pulsation control solutions and dampener maintenance products used by many drilling operations around the world, the fact that discovery is out at sea means that it could take significant investment to construct even semi-permanent infrastructure to get the oil to the surface. The company sees an FPSO (floating production storage and offloading) as the most cost-effective approach to exploiting the hydrocarbon under the sea.
FPSOs can be expensive, however, and there is considerable investment needed in undersea equipment, and in the drilling work that needs to be done. Carnavon, being a small player, could be stretched providing for these needs. Already Quadrant, which owns 80% of the venture, is looking to sell its stake. Carnavon, holder of the other 20%, may be able to attract larger, more established operators, either in Australia or internationally. Such interest in Australia’s oil could be a real a boost to the local oil industry.
Are you interested in learning more about Sigma Drilling Technologies and its pulsation control solutions? Request a free product demonstration by calling (281) 656-9298 or filling out our contact form today.
