Spudding oil wells: outback to offshore

Australia is expecting an upsurge in oil exploration over the next two years. Promising basins in Western Autralia and offshore in the Bass Strait and Gulf of Carpentaria are luring the drilling crews to some remote locations in the Australian outback and off the coast.

This year, according to the Department of National Development and Energy, some 18 wells will be drilled offshore at a cost of more than $200 million. Over the next three years, Broken Hill Proprietary Company (BHP) and Esso will spend nearly $1 billion in the Bass Strait alone.

Australia now produces about 430,000 barrels of oil per day, or 67 percent of its own oil supplies, importing only 240,000 to 280,000 barrels a day. Most of the domestically produced oil comes from the Gippsland Basin (the Bass Strait), off the Victoria coast; Barrow Island, off the Western Australia coastline; the Cooper Basin, in the outback of South Australia; and the Bowen-Surat Basin, in southern Queensland.

After several years of inactivity, BHP is proceeding with further development in the Gippsland Basin, which provides Australia with 60 percent of its oil. Sen. John Carrick, Australia's minister of development and energy, notes that oil reserves are declining less steeply in the Bass Strait now and that "it seems reasonable to think we can get through this decade without any great stress." At the end of the 1980s, however, the government is expecting oil reserves to decline quickly unless new fields are found.

New oil exploration is going on in Western Australia, where a recent discovery in the Canning Basin led to intense speculation about the importance of the discovery. Armand Hammer, the chairman of Occidental Petroleum, said at his company's annual meeting that it was the most important discovery since the North Sea. And one government energy expert in Canberra said the discovery related to reef formations that occurred right across the continent. "This will renew interest in these formations," he predicted. Other analysts in Australia weren't so optimistic, however, and testing in the basin is continuing.

New oil discoveries are taxed at a much lower rate than are old discoveries. This could cause the Australian government some problems as the old oil reservoirs dry up. The government receives about 8 percent of its reven ues from the tax on the older oil deposits.

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