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History of Petroleum Exploration in Victoria

Australian Context

The first recorded discovery of bituminous material in Australia was made in 1839 by the crew of H.M.S. Beagle in a water well near the tidal reaches of the Victoria River in the Bonaparte Gulf Basin. The first drilling carried out for the purpose of discovering oil was in the Coorong area of South Australia in 1892. The shallow hole was dry. Offshore, the first well was drilled in Albany harbour in Western Australia in 1907.

The first Australian produced petroleum was sold in Sydney in 1886. Kerosene for oil lamps was distilled from oil shale in the Blue Mountains of NSW. These deposits were worked for thirty years until the product was displaced by imported 'conventional' oil.

In the early days of water drilling in Queensland, drillers sometimes encountered inflammable gas and small quantities of oil mixed with the water. At Roma in 1900, natural gas blew into a water bore at 1123 metres and by 1904 was flowing at 70,000 cubic feet per day. In 1906 the township of Roma was connected to the gas for street lighting. It lasted 10 days before the flow stopped.

Australia's first oil field was discovered at Lake Bunga near Lakes Entrance in the Gippsland Basin in 1924. More details of this are in the Victorian history section.

In 1949, the first reflection seismic survey was recorded by the Bureau of Mineral Resources (BMR, later to become Geoscience Australia) near Roma. In 1959 the first offshore seismic survey was undertaken by GSI for Frome Lakes in the Otway Basin. In 1963, Vibroseis was introduced to Australia. The BMR tested Vibroseis in the Otway and Sydney Basins in 1964. See the glossary for a description of seismic and Vibroseis.

Much excitement was generated by the discovery by WAPET (a joint venture between Ampol and Caltex) of oil at Rough Range in Western Australia in November 1953. The well flowed heavy oil at 400 bopd from a depth of 1099 metres. Further drilling demonstrated the discovery to be small and complex with low flow rates and it was not commercial. However it was a boost to exploration at the time.

In 1957, the Commonwealth Government introduced a subsidy scheme to encourage petroleum exploration. This provided subsidies of 50% which were cut back to 30% soon after the discovery of oil at Moonie in Queensland. In 1965, the Government declared a price incentive of 75 cents over import parity to oil producers however the Gippsland Basin discoveries led to this being abandoned and a fixed price regime was introduced in 1970. This continued until 1975 when import parity pricing was re-established.

The 1960's were to change the face of the Australian petroleum industry.

At a time of flagging exploration interest in Australia, the Associated group discovered gas in 1960 at Tinbury Hills-1 near Roma in the Surat Basin. It took until 1969 before that gas flowed by pipeline to Brisbane. However, in 1961, a joint venture of AOG, Union Oil and Kern County Land, drilled Cabawin-1 in the same area and flowed oil at 80 bopd. Although not commercial, this discovery provided encouragement for the JV to drill Moonie-1. Moonie-1 flowed oil and water at 500 bopd and was to be Australia's first commercial field.

In 1963, a joint venture of Santos and Delhi encountered gas shows at Gidgealpa-1 in the Cooper Basin in the north of South Australia. Encouraged to drill on the top of the large anticline, Gidgealpa-2 flowed 3mmcfdg in 1964. Appraisal demonstrated the field to be commercial and subsequent drilling in the Cooper/Eromanga Basins demonstrated it to be a major petroleum province. Gas sales to Adelaide commenced in 1969.

At the same time that Gidgealpa was being drilled, Magellan/Exoil were drilling Mereenie-1 in the Amadeus Basin, 160 kilometres west of Alice Springs in the Northern Territory. The well blew out demonstrating a substantial gas discovery. Later evaluation of core indicated an oil leg. The JV then drilled East Mereenie-1 in 1964, which flowed gas at 30mmcfd with 120 barrels of condensate per day. Oil production did not occur until 1984 due to mechanical, political and marketing problems. Magellan continued the run of discoveries with the Palm Valley gas field in 1965. Gas was first piped to Alice Springs in 1983 and in 1987 a link was completed to Darwin.

Government bans on drilling at Barrow Island, offshore from Western Australia in the Carnarvon Basin, due to atomic tests at the nearby Monte Bello Islands, were lifted in 1963. WAPET (now with Shell added to the JV) drilled Barrow-1 in 1964. It flowed oil and proved to be a significant discovery.

The biggest success of the 1960's however, was in the Gippsland Basin, offshore from Victoria. The history of the Gippsland Basin is described below.

In the 1970's the massive gas/condensate discoveries off the north west coast of Western Australia were made. These included Scott Reef, North Rankin and Goodwyn by Woodside Petroleum, Petrel and Tern by Arco and Aquitaine and Gorgon by WAPET.

In the 1980's and 90's there were many discoveries throughout Australia, largely in the Western Australia offshore, Timor Sea and the Cooper Basin, but none have been as large or prolific as those in the Gippsland Basin in the 1960's.

Further reading

  • "This Age of Oil", Petroleum Information Bureau (Australia) 1960
  • "Petroleum in Australia The First Century" APEA 1988
  • Geological Society of Victoria 2000
  • "Speaking of Oil and Gas" written by Rick Wilkinson for BHP Petroleum Pty Ltd

Glossary

anticline A geological structure where a cross section through sedimentary strata shows an up fold
anticlinal closure A geological structure where a cross section in any direction shows an anticline. This is the most common form of petroleum trap.
API number The API number represents a standard measurement of viscosity developed by the American Petroleum Institute. The lower the value, the more viscous is the oil
Bcf Billion cubic feet
bopd barrels of oil per day
coastal bitumen strandings When naturally occurring oil is released into the sea, either through an oil seep in the sea or up faults at the time of an earthquake, much of the light component of the oil evaporates or biodegrades. The resultant bitumen substance is carried by currents until it washes up on the shore.
CDP seismic When a seismic wave travels down through the earth, it bounces off layers and the reflected wave can be recorded at the surface. The source and receiving equipment can then be moved along the line and the process repeated for more subsurface points, gradually building up a picture of the layer. Where only one sampling of a subsurface point takes place, the method is called single fold. Common Depth Point surveying permits repeated sampling of the same subsurface points which improves the quality of the data substantially by increasing the real reflection strength relative to the random noise. This is called multi fold recording.
condensate Petroleum which is gaseous in the reservoir but condense to form a liquid as they rise to the surface where pressure is less
farmin A company farms in to another company's existing permit when they come to an agreement on what the new company will contribute in cash or work to the exploration program
import parity pricing A Commonwealth Government policy which provides that companies can sell their petroleum locally at the same price as they could if they sold it internationally
magnetometer Equipment that accurately measures the earth's magnetic field. Variations in the field can be due to different magnetic properties of different rocks. Interpretations can be made of the data recorded to give an indication of the structure of the rock strata.
mmcfdg million cubic foot per day of gas
oil in place The total volume of oil in a field. It is the total of all that can be recovered plus oil that for technical reasons cannot be recovered. Typically only about 30% of oil can be recovered from a field. The Gippsland fields are exceptional in having a recovery factor of 45% or more.
seismic Seismic is vibrations or shock waves in the earth. Earthquakes are an example of seismic activity but any such energy travelling through the earth, including that created by dynamite or a hammer blow is seismic energy. The frequency is of energy used for exploration purposes is from 10 Hertz to 200 Hertz. As this falls within the frequency range that can be heard, they are sometimes called sound waves. Seismic energy for exploration can be created in a number of ways including dynamite and Vibroseis.
recoverable reserves See oil in place
reflection seismic Seismic waves travel down through the earth. Some are reflected back to the surface from layers of the rock strata and recorded at the surface. This is called reflection seismic. This is now the most common method of determining subsurface structure.
single fold see CDP seismic
spud The start of drilling of a well is called the spudding of the well
vibroseis Vibroseis is an onshore seismic source which generates sound waves by mechanically vibrating a steel pad hydraulically lowered to the ground beneath a truck. Over time, onshore, Vibroseis has almost completely displaced dynamite as a seismic source. It is safer, more environmentally friendly, cheaper and can be used in areas where there is a lot of background noise.
workover After a well has been producing petroleum for a time, the down hole conditions change and it may become necessary to re-enter the well with a specialised drilling rig to repair or alter the well. This is a workover of the well.


Conversion Factors

1 barrel 35 gallons (Imperial)
1 barrel 42 gallons (US)
1 barrel 159 litres
billion 109
trillion 1012