Abstract

Despite a wide ranging exploration effort since Australia’s first oil and gas discoveries of the early sixties, only four basins; Surat, Cooper, Perth and Dampier are commercially productive onshore. Three others contain undeveloped or sub-commercial gas reserves. Onshore oil production stands at 33 000 bopd or 5% of consumption. Reserves are 711 million barrels of liquids and 5.5 Tcf of gas.

Onshore exploration in the sixties was well distributed and efficient The limited success must be put in the context of basic prospects, areal scale, drilling density, exploration philosophy, techniques available and economics.

Generally this exploration concentrated on the obvious structural targets; first the large ones and later the smaller ones. Analyses of the resulting stratigraphic information permits the expectation that major reserves will be discovered by future “second generation” exploration, both in the already productive basins and in such presently non-productive ones as Pedirka, Galilee, Canning, Otway and Adavale.

The targets for this phase are much more subtle than those tested before. However the potentials of some are quite major. They will include reefal trends, broad stratigraphically influenced traps and deeper structural features in old poor-record areas. Pre-drilling exploration costs will be high.

Commercial success will require stable government policy, favourable economics, a highly skilled exploration approach and the intensive use of the most modern techniques, both field and interpretative. Real prospects of major potential exist and the exploration concepts and techniques are available to evaluate them.

During the first half of the seventies, exploration economics have been adversely affected by cost inflation, withdrawal of taxation and subsidy incentives and very low prices for domestic crude (basically $US2.56 bbl). As a result producers have not generated the funds for exploration to replace produced reserves and new investment has gone into more attractive situations.

There are strong signs that both the Australian government and public realise that cheap petroleum energy is a luxury that can no longer be afforded. World parity pricing ($US14.70/bbl) has been announced for new oil and up to 300% increases for “old” oil. Although present “utility pricing” philosophies for gas will die hard, gas prices should rise with the rising price of the average barrel of refinery input.

The past five years of depressed activity have provided the opportunity for a more objective assessment of the prospects of onshore Australia, of both their limitations and their promise. The improved economics will generate the reinvestment funds and attract the new funds necessary to finance their exploration.