NORWEGIAN-based energy company Statoil plans to begin drilling for oil in the Great Australian Bight by late 2018 after it took over two exploration permits from BP.
The company has also moved to quell environmental concerns over potential oil spills associated with deep-sea drilling, saying it will abandon the project if it cannot drill safely.
However, Greenpeace has slammed the announcement, voicing concerns over Statoil’s safety record.
Statoil and BP have signed a swap agreement that covers four offshore petroleum titles.
Under the deal Statoil has transferred its 30 per cent equity interest in two of its permits to BP and exited the licenses.
In return, BP has given its 70 per cent equity interest in two other permits to Statoil and relinquished those licenses.
This means Statoil now holds 100 per cent equity interest in those two permits.
The National Offshore Petroleum Titles Administrator has approved the transfers and given Statoil more time to start drilling.
The company has until October 30, 2019 to begin drilling exploration in the permit zone but it must gain the necessary environmental approvals beforehand.
Statoil’s country manager in Australia Jacques-Etienne Michel said the company was aiming to begin drilling sooner than the approved deadline and could start operating in The Bight by late 2018.
Mr Michel said one of the permit areas represented “high-impact potential in a frontier exploration setting” while the other represented “upside exploration potential”.
Images from the Sea Shepherd vessel Steve Irwin during its voyage to the Great Australian Bight. Picture: Sea Shepherd Australia
“We will now take the necessary time to systematically work through all the preparations needed to drill safely,” he said.
“While we are building on the previous work done in these licences, our operational plans will have to be redeveloped.
“In the end, it will be up to the Australian regulatory authorities to grant the necessary approvals for the activity to go ahead.
Mr Michel would not reveal the dollar-value of its investment in the project but said was “significant”.
“It will be great for South Australia in terms of jobs,” he said.
Mr Michel also acknowledged environmental concerns over the project, including worries over potential oil spills in the rough waters of The Bight.
“If we can’t do it safely we won’t do it,” he said.
“We know that there is different views on our operations in The Bight and our focus now is to take the time to prepare for the operation.
“The next step is to go and visit the key stakeholders. We will listen and learn about the key communities where we will operating.
“Everyone who wants to speak with us we will meet (with them).”
Mr Michel said the consultation would occur over the coming months.
Exploration in Australasia vice president Pal Haremo said the swap agreement would help progress the drilling project.
“We are very pleased to have reached these agreements and found a way forward for our exploration project in The Bight,” he said.
“With this transaction, we have strengthened our position in this promising, unproven basin with a large exploration upside.”
Mr Haremo said the move was in line with Statoil’s global exploration strategy of accessing at scale and targeting high-impact opportunities.”
“We have a good understanding of the geology in our licence area, based on high-quality 3D data analysis,” he said.
“We believe there could be an active petroleum system within our permit area and we are now positioned to test this potential under favourable market conditions for exploration drilling.”
Australian Petroleum Production and Exploration Association South Australian director Matthew Doman welcomed Statoil’s announcement, saying it was a “vote of confidence in the Great Australian Bight’s potential as an oil producing region”.
Mr Doman said Australian petroleum activities only take place under the highest standards of environment and safety management, strict regulation and after extensive community consultation.
“Australia has had, for decades, a safe, sustainable petroleum industry offshore Victoria, Western Australia and the Northern Territory,” he said.
“There is absolutely no reason South Australia cannot also support exploration and development in harmony with its marine environment.
“The economic benefits could be enormous. While it is very early days, success in The Bight would attract substantial investment to South Australia and see significant local job creation.”
However, Greenpeace campaigner Jonathan Moylan said the drilling project would put The Bight’s valuable marine wilderness at risk.
“Statoil has come under scrutiny for a worsening safety record, including a doubling of the volume of oil spills from their Norwegian wells last year and fourteen major safety incidents in the past eighteen months,” he said.
“(Authorities) should not approve drilling in such a sensitive area by a company with such a track record.”
Mr Moylan said The Bight experienced “some of the most extreme weather conditions on the planet”.
“Extreme deep-water drilling under such conditions is too risky,” he said.
“Any spill would be catastrophic; as stochastic modelling done previously by BP has shown the devastating impacts would reach from Perth in WA to Eden on the NSW south coast.”
The Advertiser reported in December that BP had formally withdrawn its application to drill for oil in The Bight, bringing to a close a five-year approval process.
Statoil operates in more than 30 countries.
It delivers a total oil and gas production of about two million barrels a day.