LOCAL oil and gas sector analysts are starting to see some “green leaves” indicating a potential upturn for the industry over the last quarter of 2016 and in early 2017.
The recent major breakthrough with OPEC’s decision to restrict its production numbers for the first time since 2008 seems to be holding up, and while the global crude price seems to sitting around the US$50 a barrel mark for the moment, there is confidence that it will start a gradual push upwards towards US$60 a barrel by year end.
One of the keys will be whether it is able achieve its “strong push for collaboration between OPEC and non-OPEC countries” to keep production levels under control.
On the Australian front, the drilling success achieved by Quadrant Energy and Carnarvon Petroleum at Roc-2 has been labelled a potential game changer.
Located just off the coast of Port Hedland, Roc-2 flow tested at rates up to 51.2 million scf per day of gas and 2,943 barrels of condensate per day, that is approximately 11,500 barrels of oil equivalent per day.
The JV partners are already looking at development options for the relatively near-shore field which Carnarvon estimates has the potential to meet up to 10% of Western Australia’s gas demand.
All eyes are now turned to the nearby Phoenix South-2 well where Quadrant and Carnarvon will be appraising their massive 2014 Phoenix South-1 oil discovery.
The 2014 Phoenix South-1 discovery has already been labelled as one of the largest offshore WA oil discoveries in recent memories and led to an upsurge in seismic acquisition and exploration interest.
The success of Roc-2 in being the first well in the Bedout Sub-basin to be successfully flow-tested is again likely to see an increased interest from explorers looking to the plays the well has uncovered.
There is also a great deal of industry excitement in the news that BP is joining Cue Energy to explore the giant Ironbark prospect off the north-west coast of WA.
Ironbark is estimated to have the potential to contain 15 trillion cubic feet (tcf) of prospective recoverable gas – and BO is eyeing it off as a potential LNG opportunity.
And there has been a nice run of onshore drilling successes in Queensland and South Australia that will prove important in maintaining gas and oil production on the east coast.
So to all those “doom sayers”, have a look around, there is a lot of positive news happening.