Gas is back in the news – suddenly with Santos revealing a huge gas-rich find on the North West Shelf that will add to the company’s reserves in the area and help supply Western Australia (and others) for years to come.
Santos announced that yesterday that drilling of the wholly-owned Corvus-2 well had confirmed “a significant gas resource” 90 kilometres north-west of Dampier (on the Pilbara coast), with associated liquids (like liquified petrol gas and light oil fractions).
The discovery has come in an area where its 2018 Quadrant Energy was planning, and shortly the well drilling Corvus-2 will finish that well and move to a new well site to test the big oil and gas discovery in the Dorado-1 well that Quadrant and its partner, Carnarvon Energy drilled with success last year (before Santos bought Quadrant).
Corvus -2 is an appraisal well drill to test hints of possible gas discovered in the Corvus-1 well 19 years ago. Santos has a 100% interest in the well after the purchase of Quadrant.
Santos managing director Kevin Gallagher said well had delivered a fantastic result that opened up additional exploration opportunities in the region.
“It is particularly exciting to have realised a higher liquids content and significantly bigger resource volume than we expected,” he said.
Santos said in yesterday’s statement that drilling in Dorvus-2 “intersected a gross interval of 638 metres, one of the largest columns ever discovered across the North West Shelf.”
“Wireline logging to date has confirmed 245 metres of net hydrocarbon pay across the target reservoirs in the North Rankin and Mungaroo formations, between 3,360 and 3,998 metres.
“Higher permeability zones than encountered in Corvus-1 have been observed from initial pressure sampling completed in the well. Compared to Corvus-1, initial samples acquired from Corvus-2 indicate a significantly higher Condensate Gas Ratio of up to 10 bbl/mmscf and a similar CO2 content of 7 per cent,“ Santos said in yesterday’s statement.
“Corvus-2 was drilled around three kilometres southwest of Corvus-1, which was drilled in 2000. The water depth at location is 63 metres. The field is approximately 28 kilometres from the Reindeer platform, which delivers gas to the Devil Creek domestic gas plant near Karratha, and about 62 kilometres to a Varanus Island tie-in point.
“Corvus could be tied back to either our Devil Creek or Varanus Island gas plants, where it has the potential to increase the utilisation of our existing facilities as well as provide backfill and extend plateau well into the 2030s.”
“It’s a great start to our 2019 offshore drilling campaign, and it also highlights the value of the Quadrant acquisition and our strategy of pursuing upstream brownfield growth opportunities around existing infrastructure,” he added.
The rig drilling will now move north to commence the Dorado appraisal program of up to three more wells over the rest of this year. The first well will be Dorado-2 starting next month. the rig will then drill an apprasial well for the Rock South discovery in 2016 by Carnarvon (around 70 million plus barrels of oil ) and then finish later this year with the Dorado- 3 well
Dorado-3 plans to include drill stem tests will assist with reservoir performance and obtain fluid samples required for the design of the Dorado production facilities.
Quadrant and Carnarvon had been looking for gas in Dorado-1 but instead found a massive (by Australian standards) oil field. There could also be more than half a billion cubic feet of gas and up to 16 million barrels of condensate in the Dorado field. Corvus-2 sound a bit similar
Meanwhile, East Timor has completed a deal that makes it the majority owner of the Woodside-operated Sunrise gas field after completing the previously announced deals to buy out Shell and ConocoPhillips.
The East-Timorese national oil company Timor Gap paid Shell $US300 million ($A420 million) for a 26.6% interest in the Greater Sunrise fields while ConocoPhillips received $US350 million ($A490 million) for its 30% stake. Osaka Gas of Japan has a 10% interest.
The Greater Sunrise gas and condensate fields in the Timor Sea have remained undeveloped due to a dispute between the joint venture that wanted the gas to flow to an LNG plant in Australia and the East Timorese Government that has held out to host the development of an export LNG operation.
Woodside chief executive Peter Coleman gave a hint last October of a possible compromise when he was reported saying Woodside would consider investing in the offshore production of gas from Sunrise but not the riskier pipeline or LNG plant.
That could see Woodside selling gas to East Timor at the inlet to the pipeline to the Timor coast.
East Timor is believed to be financing work on the engineering for an LNG plant and pipeline to prepare for front-end work on the project next year.
