Statoil starts drilling in northern Australia

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Norwegian oil giant Statoil, which has made huge conventional discoveries off Brazil and Tanzania and in Canada in the past few years, has started initial drilling for shale gas in the Australian Northern Territory. The work is to be carried out in partnership with the Canadian-listed firm Petro Frontier and is to cost up to 175 million dollars.

The work commenced in the northern part of Australia in the Southern Georgina basin. The Oz-Alpha 1 well is the first of the planned five vertical wells that are meant to establish shale gas exploration potential. All wells will include an extensive open hole evaluation program and up to three of the wells will be cased for future hydraulic fracture stimulation and production testing. This is planned for the third quarter of 2014.

Statoil purchased the concession to drill in the Southern Georgina basin in 2012 in partnership with Petro Frontier. 30 million dollars has already been spent on seismic imaging.

So far, the company’s push to find shale gas deposits globally have fallen short of expectations according to Pal Halermo, Statoil vice president of exploration. In a statement given earlier this month he said: “I’ve been a bit disappointed. We hoped to find North American look-alike basins in many places, but it seems like there is not the same quality everywhere”.

Statoil has already spent a considerable amount of money investing in shale plays in Russia, China and Argentina, although shale exploration in Europe proved disappointing due to fracking bans and widespread opposition combined with the shale basins being less attractive than previously assumed.

The Australia’s South Georgina exploration is meant to continue until 2016. Road and lease construction for the second well, Oz-Beta 1 is also underway and progressing on schedule.

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