Operator 'bullish' about Bass Strait
BHP Billiton says it is "bullish" about the Bass Strait gas operations it shares with ExxonMobil, and has revealed hopes of another two decades of production there.
The amount of gas remaining in Bass Strait has been hotly debated recently, as increasing exports from Queensland and restrictions on unconventional gas development in Australia's south-east increase the nation's reliance on Bass Strait.
But there has been little clarity about the volume still there, with some bearish regulators speculating there could be as little as 10 years' worth left in Bass Strait if demand is high and new fields prove hard to develop. But BHP's president of conventional oil and gas, Steve Pastor, said on Wednesday the area could still be producing after 2030.
"We see the remaining wet gas resources producing significant volumes and strong returns for many, many years ahead," he said.
"We're assessing additional opportunities to extend Bass Strait gas production plateau through 2030 and beyond."
The reference to extending the "plateau" is noteworthy, and does not necessarily imply significant new volumes of gas.
In fact, some have speculated that it may be more profitable for the Bass Strait partners to develop new gas supplies there slowly, duly profiting from the higher gas prices expected later this decade.
UBS analyst Nik Burns said BHP sounded positive about the potential of Bass Strait, but it would not come easily. "Our view is that they will need to undertake significant investment - either appraisal and or exploration, plus development - to maintain plateau production through 2030 and beyond," he said.
Mr Pastor backed recent commentary by Exxon, saying the remaining gasfields in Bass Strait would be more complex to develop.
"They're a bit deeper," he said. "We expect that they'll be a bit more expensive than some of the low-hanging fruit that we've creamed over the past 40 years."