Global energy giant’s big SA play
Global energy giant Chevron is making a play into South Australia that signals further extensive investment in a range of SA-based projects.
Its latest move, announced by the Federal Government yesterday, will deliver more than half a billion dollars into the economy.
It adds to the move Chevron made earlier this year when it paid $361.4 million to buy into two shale gas exploration projects in the Cooper Basin.
Yesterday Chevron was granted petroleum exploration permits over significant areas off the South Australian and Western Australian coasts.
Industry Minister Ian Macfarlane said the permits promised to deliver $580 million in exploration investment over the next three years.
“The opening up of new oil and gas exploration areas like the Great Australian Bight will ensure that Australia has enough energy to meet our future needs,” Macfarlane said in a statement.
“This shows that Australia is an attractive destination for investment in offshore exploration and sends a clear signal that Australia is open for business.”
In SA, Chevron Australia has been granted permits over two areas located 200km and 300km west of Eyre Peninsula in the Bight.
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The energy giant pledged to spend $237 million exploring one permit 200km west of Ceduna and a further $249 million on a permit 300km southwest of Ceduna.
Chevron Australia said it was pleased with the areas allocated off the SA coast which offered the company an opportunity to expand its resource base and reinforce the importance of Australia to its global growth strategy.
“The Bight basin is similar in size to the Gulf of Mexico and these two blocks contain significant exploration potential,” Chevron Australia managing director Roy Krzywosinski said in a statement.
Chevron Corporation has more than 100 years in the oil and gas business, starting out in the USA as Standard Oil.
One of the world’s six supermajor oil companies, it’s headquarters are in California and it runs businesses in 180 countries.
Chevron’s alternative energy operations include geothermal, solar, wind, biofuel, fuel cells, and hydrogen.
In the last two years it has spent more than $2 billion on research and acquisition of renewable power ventures.
Chevron operates geothermal wells in Indonesia providing power to Jakarta and the surrounding area, and plans to potentially open a 200 MW geothermal facility in South Sumatra.
In June this year industry analysts were intrigued by Chevron’s deal with SA-based Beach Energy.
Icon Energy Limited carved off part of its Authority To Prospect (ATP) interest in the Cooper Basin for $18 million, payable by Beach after Icon exercised a put option granted by Beach Energy earlier in the year.
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Under the farm-out Beach Energy assigned 60 per cent of its interest in PEL 218 and ATP 855 to Chevron Australia.
At the time Icon Energy managing director Ray James said; “We look forward to working with Beach and Chevron Australia as the exploration program moves forward with drilling currently underway on Hervey-1 and Keppel-1.
“The Nappamerri Trough is a potential world class gas asset and the most advanced shale and basin centred gas province in Australia. The continued exploration in the area will further de-risk the play.”
After yesterday’s half-billion commitment Chevron must now be regarded as a major player in the State’s prospects and it must surely be making eyes for prospective producers such as Senex and to some degree the major player – Santos.
Macfarlane said the Chevron permits were part of $580m of planned spending by petroleum companies over the next three years.
“This record investment in offshore exploration shows that the resources sector in Australia remains strong,” he said.
Santos and US company Murphy Oil were also awarded a permit in the Bight Basin, and promised to spend $50m.
Woodside Petroleum and Japanese company Mitsui won the right to explore in a permit off WA’s Kimberley coast, about 350km northwest of Broome, while Royal Dutch Shell won a permit that lies 360km northwest of Exmouth in the Carnarvon Basin.
South Australia’s Energy Minister, Tom Koutsantonis, said the state’s “energy revolution” continued to attract big interest from local and overseas companies.
The State Liberals welcomed yesterday’s announcement by Chevron and the Santos-Murphy Oil joint venture.
“I am particularly pleased that a major local employer such as Santos has decided to reinvest in its home state building on their assets in the Cooper Basin,” said Shadow Minister for Mineral Resources and Energy Martin Hamilton-Smith.
“We must move swiftly to ensure that South Australia is able to fully capitalise on the employment and economic development potential of resource exploration and development.
“Business in South Australia is desperate for a shot in the arm and the Great Australian Bight offers substantial opportunity for local employers.
“The government must be careful that they do not repeat the mistakes of over spruiking and under delivering on the Roxby Downs Olympic Dam expansion while the Great Australian Bight remains in the exploratory stages. ”
– with AAP
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