any word from statoil Statoil sees big potential in Northern...

any word from statoil

Statoil sees big potential in Northern Territory shale

PUBLISHED: 09 APR 2014 16:43:57 | UPDATED: 09 APR 2014 16:43:57

ANGELA MACDONALD-SMITH

Norwegian oil major Statoil sees “huge” potential in its shale exploration play in the Northern Territory, which could have scope for up to 500 million barrels of oil, according to vice president exploration Pal Haremo.
“Although it’s high risk it’s really huge, huge upsides, and that’s what we’re really after,” Mr Haremo said on the sidelines of the APPEA oil conference in Perth.
“In the case we have success here this could really be big.”
Statoil, ranked as the world’s most successful explorer, entered its NT exploration venture last year through a farm-in deal with Toronto-listed PetroFrontier. It committed to pay $US25 million in the first phase of exploration in drilling in permits that cover about 50,000 square kilometres in the remote South Georgina Basin in the central east of the NT.
Mr Haremo said Statoil has chosen the South Georgina play after screening many opportunities in shale basins across Australia. But the chance of success was still probably less than 5 per cent, he said.
“These are frontier opportunities so the confidence is really low, by definition,” he said. “If you expect to make a big discovery you need to drill 20 basins or more. It’s a wild shot.”
Statoil started drilling its first well in the permits last week at a well named OzAlpha-1. It has committed to drilling five vertical wells in the first phase of the program.
Mr Haremo said the resource potential was at least 100 million barrels of oil in the South Georgina play.
“That’s the minimum number. I would say maybe 300 [million] or half a billion barrel would be something that would be very interesting to develop.”
The lack of infrastructure in the “very remote” region would be a challenge, but the exploration work is planned in a phased way, to manage those as they arise. If they appear insurmountable, Statoil would not continue.
Mr Haremo said that while screening opportunities in Australia Statoil had decided not to pursue gas opportunities, but to go after big oil.
“We are not that interested in medium gas discoveries in the interior of Australia for local markets,” he said.
“It is really big discoveries and especially oil we are interested in.”
Statoil’s aggressive work to explore the potential of its Georgina Basin permits has resulted in a dispute with Baraka Energy & Resources, a junior partner in permits EP127 and EP128. Baraka has disputed the validity of the 2014 work program, saying it does not believe it is “technically or economically prudent”, involving “costly drilling in questionable locations.”
But Mr Haremo played down the dispute.
“We are hoping to solve the issues that Baraka have raised in a good manner,” he said.
“This is something that happens in many joint ventures around the world and we are very optimistic that we will solve the situation there.”
Statoil is also partnering BP in the British oil major’s expensive exploration campaign planned in the Great Australian Bight far off the South Australian coast.
Mr Haremo said the drilling, due to start in 2016, would be “extremely expensive”, with each of the four wells to be drilled to cost “several hundred million dollars”.