Norway’s Statoil (Reuters) has entered into partnership with Canada’s PetroFrontier Corp to explore for shale gas in Australia, it said on Wednesday.
Australia, the world’s fourth-largest exporter of liquefied natural gas (LNG), could have enough shale gas resources to double its gas resource base, the government said in May.
Statoil will farm into four exploration permits and two exploration permit applications in the Southern Georgina basin, Northern Territory, the Calgary-headquartered PetroFrontier’s said in a separate statement.
This is the first footprint of the Nordic company in Australia, while Statoil has been betting big on unconventional gas resources in the United States, identified as one of its key growth areas.
“It’s a small, but significant step for Statoil in Australia. They can use their U.S. experience as a stepping stone for exploration,” said Trond Omdal, analyst at Arctic Securities.
The Norwegian company will have an option to earn up to 65 percent of PetroFrontier’s working interest in exchange for exploration related payments and carried costs of up to $210 million over three phases, PetroFrontier said.
Statoil declined to give any estimated for the potential reserves.
“This is an exploration activity into immature areas, and we don’t want to give any indications as it’s a high risk to turn it into commercial potential,” said Baard Glad Pedersen, Statoil’s spokesman for international upstream activities.
The shale gas resources, which are primarily in central Australia, are estimated at about 400 trillion cubic feet (11.3 trillion cubic meters), the country’s resorce ministry has said.
Statoil said the partners could drill 10-20 wells by 2017, with Statoil committing $25 million for the first phase of the exploration programme.
PetroFrontier will operate the first phase of the programme while Statoil has secured options to operate from the second exploration phase in addition to increase ownership interests from 25 to 65 percent of PetroFrontier’s interests.
Trapped in deep rock formations, shale oil is extracted using new technologies like hydraulic fracturing – or “fracking” – and directional drilling.