Oil finds refuel interest in Timor Gap

Oil finds refuel interest in Timor Gap

SYDNEY (Reuter): The Timor Gap between Australia and
Indonesia is starting to live up to expectations as a significant
oil region with high hopes for 1995 after years of
disappointments, industry officials said.

Between 1985 and 1993 about 80 wells were drilled in the
23,550 sq mile (37,680 sq km) Timor Gap Zone of Cooperation,
jointly administered by Australia and Indonesia. All were
unsuccessful.

However, two major discoveries from 11 wells drilled in 1994
and one recent discovery in waters 20 km (12 miles) outside the
Gap have refueled interest in the Timor Sea region.

"With two or three good discoveries there is a lot more
enthusiasm for the area," the executive director of the
Australian Institute of Petroleum, Jim Starkey, told Reuters on
Thursday.

"These sorts of discoveries help the next drillers to refine
their concepts as well, using the experience to help people know
what to look for in the prospects," Starkey said.

Successful drilling at the Kakatua and Elang wells within
the ZOCA and Laminaria outside the area were the biggest
discoveries since the Jabiru oil find in 1983 highlighted the
potential of the Timor Sea.

The first find was in February with a substantial discovery
at the Elang-1 well, 500 km (310 miles) north of Darwin, now
operated by The Broken Hill Pty Co Ltd (BHP).

The well, the sixth drilled since Australia and Indonesia
signed a cooperation treaty in 1991, flowed at 5,800 barrels per
day (bpd).

Nine months later the Elang-2 well produced an oil flow of
6,080 bpd, which confirmed a substantial oilfield.

Record

But to add to Elang's viability, the Kakatua 1 wildcat oil
discovery well, 15 km (10 miles) away in the same block, ZOCA 91-
12, set a new record for the Timor in December, flowing at 8,100
bpd.

The two fields are estimated to contain up to 150 million
recoverable barrels and are expected to form the Timor Gap's
first commercial oil development. BHP plans joint development
within two years.

BHP holds 42 percent of ZOCA 91-12.

Santos Ltd owns 21 percent, Inpex Sahul Ltd 21 percent and
Petroz NL the rest.

The general manager of BHP's petroleum division, Joe Evon,
said the finds had lessened risks.

"It opens up the opportunities for follow-on projects," Evon
said.

"The prospectivity of the area obviously has been enhanced
after a long dry spell and I think we'll probably see some
acceleration in the well commitments by license participants," he
said.

Evon said all blocks within the Gap were already taken up,
with four other prospects already identified in ZOCA 91-12,
including Kaladi, Jalak, Bebek and Baguio.

But he said there will be renewed interest in blocks outside
of the Gap after successful drilling in October at the Laminaria
field, 70 km (22 miles) west of Elang-1.

Laminara, estimated to contain up to 200 million barrels of
light crude oil, is operated by Woodside Petroleum Ltd, which
owns 50 percent of the project.

Its partners are BHP and Shell Development Australia Pty
Ltd, part of the Royal Dutch/Shell Group, each with 25 percent.