30 Feature
TAKING A BREATHER The search for gas in unconventional reservoirs was at fever pitch just a few years ago; new technologies had been developed and the growing Asian demand for gas meant everyone wanted a piece of the action. But the lower oil price is taking its toll and progress in unconventionals has cooled. By Lindy McNamara Five years ago the resources sector was abuzz – Australia was in the grip of a mining and energy boom. Investors were clambering to get in on greenfields projects, companies were exploring at a frenetic pace and there were generally, smiles all round. One of the stars of the show at this time was natural gas. Companies were keen to take advantage of the growing eastern states and Asian markets – all that was needed was the infrastructure to transport the liquefied natural gas (LNG) and a ready supply of gas. Construction of pipelines from several basins ensued, as did the establishment of new processing and terminal facilities, including the Gladstone LNG plant (Queensland) with the ability to access South Australian gas. ISSUE 02 RESOURCING SA Autumn 2016
While there was a bountiful supply of natural gas in conventional reservoirs, attention also turned to gas in unconventional reservoirs – that is, gas that can’t be extracted by ‘typical’ methods. New technologies developed in the US meant that this gas was now more viable, it was just a matter of developing reserves and progressing the technology to suit South Australian conditions. The Cooper Basin, with its valuable South Australian acreage, was suddenly in the spotlight. While gas and oil production had been declining from the ‘mature’ basin in recent years, explorers believed it was harbouring potentially large reserves of unconventional oil & gas and now was the time to find them.
Investors dug deep and companies had drilling rigs working overtime in search of unconventional plays. The State’s oil & gas exploration spend for 2013-14 was a record $531 million, with a large portion of this focused on exploration for unconventional plays in the Cooper Basin, the offshore Bight Basin and two significant exploration wells were drilled to assess the possibility of gas in unconventional reservoirs in the Otway Basin in the South East. It seemed as though nothing could stop the unconventional revolution. Fast forward to 2016 and while there have been some considerable advances in uncovering gas reserves in unconventional reservoirs, the heat has definitely come off.