Exxon Starts Drilling Offshore Victoria

Esso Deepwater Gippsland, an Australian subsidiary of ExxonMobil, has commenced an offshore exploration drilling programme in the Gippsland Basin to search for new sources of gas, ExxonMobil Australia said August 27.

Esso Deepwater Gippsland is drilling two exploration wells, Baldfish and Hairtail, on the VIC/P70 block as part of its investment programme to find and bring online new gas supplies. Esso holds a 100% interest in the block, which is approximately 90km off the East Gippsland Victorian coast.

“These wells are targeting gas prospects, with the objective of proving up resources for timely development and contribution to the Australian domestic gas market,” Esso chairman Richard Owen said. Diamond Offshore’s Ocean Monarch semi-submersible drilling rig is drilling the wells, which is expected to take several months.

The A$120mn (US488mn) investment in drilling by Esso Deepwater Gippsland is in addition to other recent investments by ExxonMobil Australia in Victoria, including the A$4.5bn Kipper Tuna Turrum offshore project, the A$1bn Longford Gas Conditioning Plant and the future development of the West Barracouta gas field.

"This A$120mn exploration drilling program demonstrates our commitment to bringing new gas supplies to the domestic market,” Owen said. “ExxonMobil Australia is also actively considering a potential LNG import project to bring additional supply to the east coast gas market.”

ExxonMobil first talked about its plan to develop an LNG import project in Australia in June this year. Company’s plan is for the LNG import facility to be based in Victoria and could be online as soon as 2022, a spokesman for the company said June 18.