“Drill Or Drop” Decision Looms On Great South Basin Exploration
August 26th, 2009
Global oil giant ExxonMobil has seven weeks left to make the “drill or drop” commitment required under its exploration permit in the Great South Basin, regarded as one of the last potential “elephant-sized” fields for oil explorers in the world. If it decides to drill, at a cost possibly of more than $US100m, the well will be only the ninth ever drilled in the Basin. On the other hand, should ExxonMobil decide the costs are too high, it must surrender the permit to the Crown Minerals division of the Ministry of Energy and Development.
ExxonMobil spokeswoman Rebecca Arnold reportedly says the company is still analysing data from the permit area and expects a decision by early October. The ocean floor is up to a kilometre deep in parts of the 16,390 sq km permit area. Eight wells were drilled by Hunt Petroleum and partners between 1976 and 1984, with hydrocarbons recorded in 4 of them. Kawau-1A drilled to a depth of 3834 metres tested gas with some condensate at up to 6mmcfd. Reserves estimates at 461bcf were non-commercial in view of the water depth and isolation. Tora-1 had strong shows but could not be tested.
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