Coalition hits the gas

FEDERAL government plans to triple the size of oil and gas fields in the Otway Basin are progressing, with drilling rights in one of the region’s largest exploration licence areas (VIC/P79) awarded to the ASX listed 3D Oil.

Granted in February this year, the five-year exploration permit over 2,575 square kilometres allows the company to drill an exploration well which it plans to complete within the next three years at an estimated cost of $30 million.

3D Oil is already operating in another title area (T/49P) off the west coast of King Island in a joint venture with US company ConocoPhillips, that lease covering 4,689 square kilometres and stretching twice the length of the island.

Federal Resources Minister Keith Pitt said a potential discovery in the Otway Basin licence could be commercialised “relatively rapidly due to the proximity to existing infrastructure in the area”.

“A gas discovery in the permit would be welcomed as a contribution to protecting jobs on the east coast including in regional cities like Geelong, Ballarat and Bendigo,” he said.

The Surfrider Foundation’s national campaign director Damien Cole suspects a majority of people in the region would be unaware of the expanding oil and gas footprint off the coast.

“Judging by the community’s reaction from the Fight for the Bight campaign, I think the coastal Victorian communities will be outraged and rightfully so.”

Mr Cole also raised concerns about 3D Oil’s joint partner ConocoPhillips, that’s currently dealing with the fallout from gas leaks at seven different well sites in one of its Alaskan projects in North America.

Last year the federal government opened up 17,032 square kilometres of new oil and gas titles in the Otway Basin for extraction, and while commercial bidding on these areas closed in March, it’s unlikely the successful applicants will be announced for another six to 12 months.

One particularly contentious release area within kilometres of The Twelve Apostles (V21-3) did not receive a bid and has now reverted back to vacant acreage, according to Mr Pitt.

“There will not be a permit granted over this area in this round,” he said.

Oil and gas projects in the region were given a further push in the federal government’s recent budget, the APA group’s Southwest pipeline expansion project and Lochard Energy’s Heytesbury Underground Gas Storage project each named as ‘priority projects’ that will be supported by a $50 million fund designed to accelerate development of the sector.