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.