Australia to Ban Shale Mining Under Great Barrier Reef

SYDNEY - Mining for shale oil under the Great Barrier Reef will likely be banned by Australia's government, the Guardian newspaper reported Thursday, citing briefing documents. 

Queensland Energy Resources is building an onshore open-cut rock mine and a demonstration processing plant near Gladstone to determine whether to develop areas holding an estimated 8 billion barrels of shale oil after the state government lifted a moratorium on the shale-oil industry in February. 

But a briefing sent to federal environmental minister Tony Burke seen by the Guardian reportedly says that Canberra has the power to put a brake on the nascent shale-oil industry if it interferes with the reef, which is a world heritage site. 

"World heritage principals on mineral extraction are absolutely clear," the newspaper quotes Mr. Burke as saying. "You can't extract minerals or oil from under the Great Barrier Reef." 

Queensland Energy said it has no plans to mine shale reserves below the high tide line, the Guardian added.

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Australia to Ban Shale Mining Under Great Barrier Reef

SYDNEY - Mining for shale oil under the Great Barrier Reef will likely be banned by Australia's government, the Guardian newspaper reported Thursday, citing briefing documents. 

Queensland Energy Resources is building an onshore open-cut rock mine and a demonstration processing plant near Gladstone to determine whether to develop areas holding an estimated 8 billion barrels of shale oil after the state government lifted a moratorium on the shale-oil industry in February. 

But a briefing sent to federal environmental minister Tony Burke seen by the Guardian reportedly says that Canberra has the power to put a brake on the nascent shale-oil industry if it interferes with the reef, which is a world heritage site. 

"World heritage principals on mineral extraction are absolutely clear," the newspaper quotes Mr. Burke as saying. "You can't extract minerals or oil from under the Great Barrier Reef." 

Queensland Energy said it has no plans to mine shale reserves below the high tide line, the Guardian added.

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Chevron Discovers Additional Natural Gas Offshore Australia

Chevron Corp. said it made another natural-gas discovery off the shore of Australia, adding to the oil major's portfolio in the region, where the company has major liquefied-natural gas projects.

Chevron, the second-largest U.S. oil company by market value after Exxon Mobil Corp., said the discovery well, located in the Carnarvon Basin about 106 miles northwest of Barrow Island, encountered approximately 132 feet of net gas pay. The well, located in 3,570 feet of water, was drilled to a total depth of 11,909 feet.

Melody Meyer, president of Chevron's Asia-Pacific exploration-and-development unit said a string of discoveries in the Carnarvon Basin has created a robust gas portfolio in Australia, which helps position Chevron to supply future LNG demand in the Asia Pacific region.

Chevron Australia is the operator, with a 50% interest.

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Ezion's Marine Supply Base in NW Australia Operational End-2013

Singapore-listed Ezion Holdings announced Friday that its marine supply base in North Western Australia will be operational by the end of this year, with basic load out and lay down services to be made available.

The company said in a disclosure that several oil and gas services companies have expressed their interest in using the supply base's facilities.

The supply base is built on a plot of land leased by Ezion, from North West Australia, in July 2010. The sea front land, located in close proximity to oil and gas projects in Northwest Australia, Papua New Guinea and Timor-Leste, is leased to Ezion for an initial period of five years, with a 30-year extension option at monthly rental rates.Ezion noted in 2010 that it has plans to develop marine bases in other areas, based on a similar concept.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Chevron Evacuates Workers in Western Australia as Cyclone Nears

PERTH - Chevron Corp. has begun evacuating workers from some of its oil and natural gas operations in Western Australia state as Tropical Cyclone Rusty threatens to unleash high winds and flooding in the Pilbara region over coming days.

Chevron is moving non-essential workers on Barrow and Thevenard Islands as a precautionary measure, and tying down equipment ahead of the cyclone's arrival, the U.S. company said in a statement Tuesday.

Chevron operates oil facilities on the two islands, while Barrow Island is also the site of its 52 billion Australian dollar ($53.4 billion) Gorgon gas-export project, which is under construction and around 55% complete.

Workers have also been evacuated from the Atwood Osprey drilling rig, and Chevron said it is continuing to monitor the situation closely.

Woodside Petroleum Ltd., operator of the North West Shelf and Pluto gas-export facilities at Karratha, separately said it is taking precautions to "safeguard our people and assets" without being more specific.

Australia's three biggest iron ore ports are readying for the tidal surges, destructive winds and heavy rainfall predicted as Rusty heads towards land in the next day or so. Port Hedland, Cape Lambert and Dampier ports were closed Monday due to rough seas ahead of the storm.

Fortescue Metals Group Ltd. said its port and rail operations at Port Hedland have been locked down in accordance with cyclone readiness procedures.

"All work has been suspended on site," the Perth-based company said in an email.

Atlas Iron Ltd. said it has stopped work at its flagship Pardoo mining operations located about 75 kilometers east of Port Hedland.

"It is very much bearing down on us," managing director Ken Brinsden said of the cyclone on a conference call with investors. "It is looking almost like a direct hit on the Pardoo site."

He said Atlas didn't expect the temporary shutdown to affect the company's full-year guidance. Atlas Iron is targeting shipments of between 7.4-7.7 million metric tons of iron ore this fiscal year.

"There will be an impact, clearly, but we would expect to get back in pretty quickly," Mr. Brinsden said.

Rusty is expected to move close to the Pilbara coastline Wednesday and may intensify into a Category 4 system, Australia's second-most severe cyclone ranking that assumes very destructive winds and structural damage.

Australia's Bureau of Meteorology has also warned of flooding in some areas, along with a dangerous storm tide as the eye of the cyclone nears land.

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ConocoPhillips, PetroChina Sign Deals in Australia, China

ConocoPhillips said PetroChina Co. will acquire an interest in two Western Australia exploration assets and the companies will jointly identify unconventional resource reserves in China.

As part of three deals that are pending government and partner approvals, PetroChina will acquire a 20% working interest in the Poseidon offshore discovery in the Browse Basin and 29% in the Goldwyer Shale in the onshore Canning Basin in Australia.

The companies will also jointly study the potential for unconventional resource development in the roughly 500,000-acre Neijiang-Dazu Shale Block in the Sichuan Basin in China. If technically and commercially viable, they will advance development under a production-sharing contract, which would be agreed upon during the study period.

"ConocoPhillips recognizes the Sichuan Basin as having some of the most prospective marine shales in China and looks forward to working with one of the world's leading energy companies," said Don Wallette, ConocoPhillip's executive vice president, commercial, business development and corporate planning.

The U.S. energy company was cleared last week to resume full operations at the Penglai 19-3 oilfield in China's northern Bohai Bay after being sanctioned by Beijing over oil spills in 2011. Its recent fourth-quarter earnings fell 58% as commodity prices fell and as the exploration-and-production company was hurt by lower average realized prices for oil and natural gas.

Meanwhile, in December, PetroChina said it agreed to buy BHP Billiton Ltd.'s stake in the planned Browse gas-export project in Western Australia for $1.63 billion in cash, leading Nomura analysts to say the state-backed oil company needs to take a "more disciplined approach" in its overseas acquisition strategy.

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Dynasty Metals Australia Receives Grant for two WA Petroleum Licenses

Dynasty Metals Australia (DMA) disclosed Wednesday that it has been granted two onshore petroleum licences, EP 484 and EP 485, within the Northern Perth Basin in Western Australia.

DMA noted that the approval process for the two applications was substantially delayed.

"The two applications were made in April 2007 and due to the long negotiations with one of the grantee parties, the process was forwarded to the Native Title Tribunal for mediation. It was [then] determined that the Native Title over the licenses had been extinguished," DMA said in its statement.

The two leases are located in a sedimentary package some 31 miles (50 kilometers) east of Geraldton, and they cover an area of 436 square miles (1,129 square kilometers). The EP 485 permit covers the Irwin River coal measures.

Exploration targeting coal seam methane has not been undertaken in the area although oil and gas explorers have reported gas flows when drilling the Irwin River Coal Measures.

"The tenements are well located for development with respect to existing gas infrastructure, resource projects and regional ports and railways," DMA added.

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Eni Australia Commits to Drill Offshore Blackwood-2 Well

MEO Australia revealed Monday that Eni Australia has agreed to proceed with the drilling of the Blackwood-2 exploration well to evaluate the gas potential of the Blackwood area.

Discovered in early 2008, the Blackwood-1 well encountered a 161 foot (49 meter) gross gas column. Initial gas analysis confirmed that the gas is relatively dry and contains carbon dioxide levels in the 25 percent to 30 percent range; the gas is deemed to be suitable for methanol production.

Immediately following the discovery, MEO bought new seismic data over part of the structure. Eni completed the Bathurst 3D seismic survey covering the Blackwood East structure, acquiring 766 square kilometers of 3D data.

MEO has a 50 percent participating interest in Blackwood-2, which will be fully funded by Eni including production testing. Eni has 18 months from the date of election to drill Blackwood-2. 

The Blackwood discovery is located in permit NT/P68 offshore Australia in 200 feet (61 meters) of water. Eni Australia is the operator of the permit. 

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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