Beach Energy Ltd. (BPT) said the Cooper Basin region in Australia’s outback, where it’s searching for natural gas with Chevron Corp. (CVX:US), will be a “major onshore petroleum province.”
The region, straddling the South Australia and Queensland state borders, may have enough gas to allow exports, Reginald Nelson, managing director of the Adelaide-based company, said in an interview yesterday with Australian Broadcasting Corp. television, according to a transcript.
The investment of as much as $349 million by Chevron in Beach’s exploration follows shale investments by ConocoPhillips, Statoil ASA, BG Group Plc and Hess Corp. in Australia, a nation estimated by the U.S. Energy Information Administration to have the world’s sixth-biggest potential reserves.
“This reinvigorates the Cooper as a gas producing province and it’s one of the major onshore gas producing areas in Australia,” Nelson said. “If the volumes are there then clearly there’s opportunities to look at export potential.”
Chevron’s is the biggest single investment in Australian shale. Beach shares have risen 15 percent since the announcement on Feb. 25.
The Cooper Basin may help supply $60 billion of projects to export liquefied natural gas from Australia’s east coast, according to a Jan. 11 report from Commonwealth Bank of Australia. Domestic gas prices in eastern Australia may double to A$10 a gigajoule between 2014 and 2019 after the LNG projects in Queensland begin shipments to Asia, according to Macquarie Group Ltd.
Beach’s discoveries may hold as much as 600 trillion cubic feet of gas, compared with 6 trillion cubic feet produced in the 43-year lifetime of the Moomba field that Santos Ltd. operates in the Cooper, Nelson said.
The huge volume of petroleum that’s in unconventional rock formations, rather than easily tapped oil and gas wells, challenges the idea that the world has hit a supply peak for the commodity, he said.
“What we’ve tapped into to date in terms of oil and gas is the so-called conventional, and that is oil and gas that has really escaped from where it is formed,” he said. “Ninety percent of it’s probably still down there.”
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