Woodside Petroleum has struck trouble in a second exploration joint venture, partner Petrel Resources revealing the two are in dispute over work in a permit in the little-explored but high-potential Porcupine Basin off south-west Ireland.
The dispute over exploration commitments in the FEL4/14 permit is, however, not preventing the partners chasing finds in a second block, although drilling is scheduled to get under way only after September 1 next year.
Petrel, which estimates
the two permits farmed out to Woodside in 2013 have the potential to hold more than 1 billion barrels of oil, told shareholders at its annual meeting in Dublin on Monday that Woodside's decision not to continue into a second phase of exploration in the 4/14 block was at the centre of the dispute.
It contends that the Australian company has an obligation to carry out a seismic survey, but the permit has now been relinquished without any seismic work being completed.
The dispute, which is now subject to arbitration in London, comes as
Woodside's entry into a Senegalese exploration venture is still being disputed by junior partner FAR Ltd, which alleges its pre-emptive rights were ignored. While FAR last month kicked off an arbitration process over the issue, that venture too is continuing exploration work, recently reporting a discovery at the FAN South-1 well off Senegal.
In Ireland, Petrel said Woodside is using data from a 3D seismic survey completed last year to work up targets for drilling, with one or more wells to be drilled between September 1 next year and August 31, 2022. The exploration target is likely to be in 600-800 metre deep water.
"These are relatively shallow depths nowadays, which should facilitate the economics of any discovery," Petrel said in a statement after the AGM.
Petrel underscored the renewed industry interest in the Irish Atlantic Porcupine Basin, which it said was due to apparent similarity to plays in West Africa targeting rocks from the Cretaceous geologic period and to the "pre-rift Jurassic play" in eastern Canada.
Woodside got into the region on "great terms," head of exploration Phil Loader said at an investor briefing in May, before several majors took up acreage through an bidding round in 2015.
Meanwhile a separate consortium led by Providence Resources has started drilling some 220 kilometres off the coast of Cork and Kerry, targeting some 5 billion barrels of potential oil resources in the Druid and Dromberg prospects. Petrel – and Woodside – will be watching the drilling closely.
"Any major discovery in this basin will transform industry perceptions and the farm-out market," Petrel said.
At its investor briefing in Sydney in May, Woodside also pointed to the Beaufort oil prospect to be drilled in the Porcupine Basin in the 2017-2020 period. That prospect is held in
a separate venture between Woodside and Bluestack Energy.
More immediately, Woodside is due to drill the Swell exploration well this quarter in the WA-483-P permit off the coast of Exmouth in Western Australia,
targeting gas that could feed LNG plants near Karratha. It is also drilling in Senegal and Myanmar this quarter.
Read more:
http://www.copyright link/business/...gxi5y4?_sm_au_=iVVWpKMjWkK7k77n#ixzz4npCdodyj
(20min delay)