Australian optimistic about Timor Gap potensial

Australian optimistic about Timor Gap potensial

ADELAIDE (Reuter): Australian oil explorers are cautiously optimistic about the potential of the Timor Gap after three promising oil strikes and one gas strike over the past year, an oil conference heard this week.

After nearly a decade of disappointing exploration in the waters between northern Australia and Indonesia, 1994 saw a turnaround in the area's fortunes, Australian Petroleum Exploration Association (APEA) chairman Peter Power told APEA's annual conference in Adelaide.

Oil was discovered in the Elang 1 and Kakatua 1 wells in the Australian/Indonesian Timor Gap Zone of Cooperation Area, set up by the two governments four years ago in previously disputed waters to split revenue from any production.

Drilling last October also found oil at the Laminaria 1 well operated by Woodside Petroleum Ltd to the west of the ZOCA which flowed at 7,500 barrels a day.

"This has refocused attention on the Zone of Cooperation," said Power, who is managing director of Ampolex Ltd.

"The discovery of potentially large resources of oil and gas in the Timor Sea and North West Shelf regions during the latter part of 1994 may add significantly to Australia's reserves once testing and appraisal drilling is completed," Power said.

The Elang well is owned a group involving The Broken Hill Pty Co Ltd, Inpex, Santos Ltd and Petroz NL.

Petroz geophysicist Ian Young said the Elang find proved oil exists in the western area of the ZOCA: "The recovery of light under-saturated oils... has diminished fears that the western ZOCA is gas-prone, a concern held previously by many industry participants," he said in a conference paper.

The Kakatua consortium is also headed by BHP.

Santos' general manager of exploration, Lloyd Taylor, said the Timor Gap could hold more than 200 million barrels of crude oil although this has yet to be proved and the area's potential is unlikely to be realized for another two years.

Largest discovery

"But this is potentially the largest oil discovery in years," he told the three-day conference that ended yesterday.

The discovery of gas at the Bayu well, southeast of Elang, by a consortium led by Phillips Petroleum Co, also fueled renewed interest in the area.

The Bayu area spreads into another permit headed by BHP. BHP Petroleum's general manager for Australia/Asia, Mike Baugh, said premature enthusiasm should be kept in check.

"One well doesn't make a big find," cautioned Baugh. He said the two groups of permit holders are sharing information and carrying out more drilling to establish an estimated size of the field.

"Then we will put our heads together and think about drilling as one," he told a media briefing.

Petroz's Young said the discoveries will trigger further exploration programs in the area.

"A number of attractive prospects and leads have been identified in the vicinity of the Elang Field and on the Flamingo High (a peak south of Elang) that offer significant exploration potential," he said.

But an APEA spokesman said despite the encouraging discoveries in the ZOCA, proposed activity in 1995 is to be reduced substantially.

"The reduction has been brought about by the relatively small amount of work outstanding in the committed programs for the first three year terms of exploration permits in the area," the spokesman said.