Global oil giant Chevron says Bight oil drilling still years away

DRILLING in the Great Australian Bight is likely to be two or more years in the future at the earliest, with global oil giant Chevron at the early stage of its exploration work.

• BP must compensate for $1.4bn Bight drilling pullout
• Ian Smith: BP’s decision no cause for jubilation in SA
• Sarah Hanson-Young: Bight’s too precious to put at risk

DRILLING in the Great Australian Bight is likely to be two or more years in the future at the earliest, with global oil giant Chevron at the early stage of its exploration work.

While Chevron would not give a definitive timeline of when it is likely to begin drilling the first of four wells — which it is committed to under a $486 million agreement with the Federal Government — it is understood the company has a vast amount of early stage seismic data, which is collected from the sea surface — to examine.

Chevron’s “committed’’ work program was the second largest behind BP’s $605 million program (with another $832 million intended totalling $1.4 billion) which the latter pulled out of on Tuesday, just months or even weeks before drilling was expected to start.

Chevron has so far just collected its early stage data.

“Chevron participated in a two-stage multi-client seismic survey of the Great Australia Bight involving more than 22,000sq/km of 3D seismic data,’’ the company’s website says.

“The survey was completed safely, and represented the largest seismic survey undertaken in Australasia and Chevron globally to-date.’’

While Chevron’s four well commitment was initially scheduled to start in 2017-18, a State Government submission from earlier this year indicates the company has applied for this timeline to be extended.

“Chevron has recently applied for a suspension of work program commitments and extension of permit term in light of delays in processing data and identifying drilling targets,’’ the submission says.

“This is currently being considered by agencies prior to recommendations to the joint authority.’’

A Chevron spokeswoman On Wednesday said the company was continuing with its work in the region.

Proposed exploration in the Great Australian Bight by different oil and gas companies. Pic: Karoon Gas Australia.

“Chevron Australia continues to progress its work program associated with the Great Australia Bight,’’ she said.

“As we do with all our business activities, we work closely with government regulators and stakeholders to ensure any proposed work is completed under the appropriate environmental conditions.”

Bight Petroleum and Murphy Oil, which is in a joint venture with Santos in which it is the operator, have also been contacted for comment but have yet to respond.

Both companies have more modest exploration commitments, with Murphy Oil/Santos committed to a $64 million program with no guaranteed wells and Bight a $68 million program and one exploration well.

Bight’s website indicates the company is still looking for a joint venture partner to help fund its early stage works, however its environment plan for seismic works was accepted by the federal regulator back in 2014.

Chief executive of energy advisory firm EnergyQuest, Dr Graeme Bethune, said exploration budgets had been shrinking globally so it was to be expected that companies were pulling back or looking for extensions to their funding commitments.

“The issue is everybody is slashing their exploration budgets,’’ he said.

“Three years ago or so BP’s global exploration budget was about $US3.5 billion, now it’s $US1 billion. It doesn’t take too many $US100 million wells to take up all of that.

“Chevron’s global exploration budget is under a billion dollars now.

“In those circumstances companies will focus more on near term prospects with lower geological risk.’’

Mr Bethune said areas such as the GAB would take many years to develop, even if early results were promising.

Meanwhile the major political parties on Wednesday voted down a motion put to the Senate by South Australian Greens Senator Sarah Hanson-Young calling on the Turnbull Government to permanently ban all oil exploration and drilling in the Great Australian Bight.