ConocoPhillips finds gas off Australia

ConocoPhillips, the oil giant, announced on Monday that it had discovered gas off of the coasts of southeast Australia. The company began its first exploration drilling in November. Two targets located off the coasts of Victoria were identified by wireline logs. The work will continue for another two weeks, before the second exploration well is drilled to confirm that there are large gas reserves in Australia's east-coast market. Jan-Arne Johannsen, the country president of the company, said that the discovery was encouraging, and it was the first to be made in the area in four years. He said, "We are looking forward to drilling our second exploratory well in December."

The U.S. firm shares the Otway Basin Permit with 3D Energi, a junior Australian company. Korea National Oil Company joined the venture last May. Conoco joined 3D around the same time as it divested its interest in the Darwin project and associated offshore fields.

Conoco stated that operations are still ongoing at Essington-1 and, once the well is plugged up and abandoned, it will proceed to the second exploration well. Six wells will be drilled across two permits with the option of four more. The partners are hoping to find a new commercially-sized supply source for Australia's East Coast, where shortages of materials are predicted in the late 2020s. Canberra has threatened to restrict exports if the domestic demand is not met. It also runs Australia Pacific LNG, a Queensland-based company. By midsession, shares of 3D had risen by almost 35% to A$0.16 ($0.10). Helen Clark, Helen Clark and Stephen Coates (reporting)

(source: Reuters)