Oil and gas producer Beach Energy has discovered more than double the amount of gas it expected from a new gas field off the coast of Victoria, which it says will help buyers in south-eastern states avert winter shortfalls feared within five years.
Beach Energy, whose top shareholder is billionaire Kerry Stokes’ Seven Group, said the Enterprise gas field identified in the Otway Basin in December would add 97 petajoules of new gas reserves to the state’s gas supply.
Chief executive Matt Kay described the new gas field as a “cracker”.
“We are spending a billion dollars on offshore projects, we can see a decline facing east-coast gas supplies and we are here to fill the gap,” Mr Kay said.
“I’m not sure we could be doing any more as a company to support east-coast gas supply and a state like Victoria.”
Beach is aiming for gas imports to start flowing by as early as 2022, ahead of potential winter supply shortfalls from 2023. The Australian Energy Market Operator is warning of a supply squeeze facing Victoria and New South Wales by 2023 due to declining output from fields in Bass Strait, which once supplied 40 per cent of the east coast’s needs.
Australia is the world’s biggest exporter of natural gas – a fuel widely used in power generation, heating and manufacturing – but most is produced in the nation’s north, far away from demand centres in the south-eastern states, and is sold on long-term contracts to overseas buyers.
Federal Resources Minister Keith Pitt on Monday described Beach’s successful drilling result as a demonstration of a continued “bright future” for the offshore oil and gas sector and the Morrison government’s ambition of a “gas-led” economic recovery from the COVID-19 downturn.
The update on Enterprise came as Beach Energy revealed its half-year profit has dived by more than 50 per cent in the six months to December, after a bruising slide in crude oil prices throughout 2020.
Beach, like oil and gas producers worldwide, has been hit hard by the destructive impact of COVID-19, as lockdowns and travel restrictions to arrest the spread of the virus sapped demand for fuels. Since collapsing to below $US20 a barrel, the price of the benchmark Brent crude has recently risen back above $US60 a barrel for the first time in more than a year as demand recovers and major exporters agree to curtail output.
Meanwhile Santos, one of the nation’s largest oil and gas companies, has taken further write-downs on the value of its assets after lowering the level of its gas reserves in WA.
Managing director Kevin Gallagher said the producer would take a $US98 million ($126 million) impairment of goodwill in its 2020 full-year results, to be released to the market on Thursday, reflecting a 27 million-barrel reduction in its reserves at the offshore Reindeer gas field, which has hit water earlier than previously expected.
Another $US41 million ($52 million) of impairments related to “other late-life, exploration and evaluation assets,” Santos said.
The writedowns bring the company’s pre-tax impairments to $895 million ($1.15 billion) for the full year following an earlier $US756 million hit taken last year as the shock of coronavirus began reverberating through the sector.
Source: Thanks smh.com