Norwegian oil firm Statoil is set to take over BP's mantle in Australia's Great Australian Bight after agreeing a swap deal with the oil major.
BP dropped its plans for drilling two deepwater wells in the area after a tussle with Australia's National Offshore Petroleum Environmental Environment Agency (NOPSEMA), against a backdrop of protest from environmental groups over drilling in the Great Australian Bight. BP had said the project would not be able to compete for capital investment with other upstream opportunities.
An Australian Senate Inquiry into drilling in the Bight mostly supported drilling, however, and now Statoil has signed a swap agreement with BP and has been granted regulatory approval to take over two exploration permits, reviving prospects of drilling in the basin.
BP was operator of four permits, EPPs 37, 38, 39 and 40, with Statoil holding 30% interest in all four. Not Statoil will give its 30% interest in 27 and 38 to BP, while BP will transfer its 70% operated interest in EPPs 39 and 40 to Statoil. The National Offshore Petroleum Titles Administrator has approved the transfers, making Statoil the operator of EPP 39 and EPP40.
Statoil has also been granted a suspension and extension of the work commitments in EPP39 and EPP40. The approved extension includes the drilling of one exploration well in EPP39 before the end of October 2019.
“With this transaction, we have strengthened our position in this promising, unproven basin with a large exploration upside,” said Pål Haremo, vice president of Exploration in Australasia.
“We have a good understanding of the geology in our license area, based on high-quality 3D data analysis. We believe there could be an active petroleum system and we are now positioned to test this potential under favorable market conditions for exploration drilling."
Statoil has mapped a number of prospects in its license area, including the Stromlo-1 well candidate in EPP39 - one of BP's targets. "Stromlo offers high-impact potential in a frontier exploration setting, while EPP40 represents upside exploration potential," says Statoil.
“While we are building on the previous work done in these licenses, our operational plans will have to be redeveloped,” said Jacques-Etienne Michel, Statoil’s country manager in Australia.
“In the end, it will be up to the Australian regulatory authorities to grant the necessary approvals for the activity to go ahead. Over the coming months, we will engage in dialogue with a wide range of stakeholders, including the South Australian community," said Michel.
BP’s proposed Great Australian Bight plan originally consisted of drilling four exploration wells. The first two wells were to be drilled with a newbuild semisubmersible mobile offshore drilling unit in 1150-2250m water depth, that was due to start in Q4 2016.
The Australian Petroleum Production & Exploration Association welcomed the move saying Statoil would join other operators in the Great Australian Bight, including Chevron.
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