Skip to content

To report a serious incident to DEM, as required by Section 85(2) of the Petroleum and Geothermal Energy Act 2000, licensees should contact the serious incident reporting hotline on: (08) 8463 6666.

On this page

The South Australian Department for Energy and Mining was established in March 2018 with the aim of delivering affordable, reliable and secure energy supplies in a transitioning national energy market, and to responsibly unlock the value and opportunities offered by South Australia's mineral and energy resources. DEM Energy Resources Division is the lead agency in facilitating petroleum and geothermal activities in the state. It has responsibility for facilitating the generation of royalty income, economic development, wealth and jobs, and the minimisation of impacts on the environment and public safety through efficient management of the state's petroleum and geothermal rights on behalf of the people of South Australia.

The right geology, together with policy innovation and excellent investment frameworks are reasons why South Australia is leading oil and gas transformation in Australia.  South Australia is widely regarded as having one of the country’s most effective upstream petroleum frameworks. It offers a supportive investment framework, a trusted regulatory framework, benefits from its central location and pre-existing infrastructure, and is a jurisdiction focused on increasing capabilities and productivity. This is reflected in results of the 12th Fraser Institute Global Petroleum Survey, released in November 2018 which again rated SA as the best performing jurisdiction in the Oceania region.

Petroleum exploration and development

ONSHORE PETROLEUM LICENSING

Petroleum Exploration Licences: Forty three petroleum exploration licences (PELs) are current over the State’s onshore petroleum prospective areas. Nearly all of the petroleum prospective regions of the State are now under licence or application, with the total area of granted PELs covering 197,068.42 km2, and a further 365,0274 km2 of the State under application (Figure 1).

Figure 1. South Australian petroleum tenements

SA Tenements

Overlapping applications can be made over current PEL Applications (PELAs) at any time but the first PELA has priority for determination followed by successive applications.

Petroleum Retention Licences: An initiative in 2013 to increase the extent of retention and production licences has been very successful resulting in an increase from 7,645 sqkm up to the current 25,283 sqkm in February 2019. 215 petroleum retention licences (PRLs) are current over an area of 17,970 km2, with almost all of these located over proven productive oil and gas play trends in the Cooper/Eromanga Basins. Petroleum Retention Licence (PRL) agreements for proven oil and gas play trends in the Cooper/Eromanga Basins have to date been concluded with Senex Energy, Beach Energy, Drillsearch Energy (now a Beach Energy subsidiary) and Santos Limited (and joint venture partners with those companies).

Since the first of the PRL initiative licences were granted in May 2014 to end December 2018, 45 exploration wells have been drilled resulting in 18 new field discoveries.  A further 9 appraisal wells have been drilled (6 successful) and 3 development wells (2 successful).

Figure 2. Cooper Basin tenements

Cooper Tenements

DRILLING AND SEISMIC SURVEYS

In 2018, 84 wells were drilled in the Cooper-Eromanga basins.  In the term 1 January to 31 December 2018, a total of 71 wells (5 exploration, 16 appraisal, 48 development and 2 CSG exploration wells) have been cased for production in the Cooper-Eromanga basins (Figure 3). Leigh Creek Energy drilled 19 UCG exploration wells in the Telford Basin in 2018.

Up to 130 wells are planned in the Cooper-Eromanga basins in 2019 (Figure 3). Many will be horizontal wells targeting Cooper Basin gas and Eromanga Basin oil reservoirs. The first horizontal well drilled in South Australia was Meranji 14 DW1 in 1993 targeting oil in the Eromanga Basin. Since then over 42 horizontal wells have been drilled in the Cooper and Eromanga basins.

It is business as usual for conventional oil and gas exploration in the Otway Basin in the South East in 2019. Three conventional wells are expected to be drilled in Q1 2019, with construction and commissioning of gas processing infrastructure later in 2019 (Figure 4).

Seismic acquisition in SA in 2018 was limited to a small 2D seismic survey acquired by Leigh Creek Energy in the Telford Basin, associated with their ISG demonstration project.

Figure 3 Exploration, development and appraisal drilling statistics, 2009 to 2019.

Drilling stats

Figure 4 PACE Gas Projects and upcoming petroleum activity 2019-20

PACE GAs

ROYALTIES AND PRODUCTION

Cumulative petroleum production is shown in Table 1. Detailed production data (to well and individual pool level) can be downloaded via the PEPS-SA database: https://energymining.sa.gov.au/petroleum/data_and_publications/peps-sa

Petroleum royalty payments to the State for the 2017/18 financial year were $85.9m, with estimated total product sales of $1.2b.  This brings the cumulative royalty paid since 1970 to $3.02b (2017/18 dollars) and cumulative sales to an estimated $50.05b (2017/18 dollars). Since 1991 the average royalty paid equals 6.7% of the sales value.

Table 1. South Australian Cooper Basin annual petroleum statistics

Cumulative Production (2017-18)
5.44 TCF sales gas (since 1970), 207.55 mmbbl oil (from 1983), 85.73 mmboe LPG (from 1984), 84.96 mmboe condensate (from 1983)


Annual  Production (2017-18)
65.88 bcf sales gas, 6.45 mmbbl oil, 1.48 mmboe LPG, 1.99 mmboe condensate


Table 2. Cooper and Eromanga basins conventional oil and gas success rates, Jan. 2002 to 31 December 2018

  New Entrants Santos Joint VentureAll
Exploration wells drilled 295 45 340
Commercial success rate (%) 40 45  
Commercial success rate (%) 45 53  
Appraisal and development wells drilled 188 604 792
Commercial success rate in appraisal and development wells (%) 91 95  
 

Figure 5 Oil exploration success rates for the SA Cooper region, 1962 to 2019.

Fig 5
 

Figure 6 Petroleum sales and royalty payments 2007–08 to 2017–18.

Fig 6
   

Figure 7
Gas sales, 2007–8 to 2017–18
.

Fig 7

 

Figure 8
Crude oil sales, 2007–08 to 2017–18.

Fig 8

Figure 9
Condensate sales, 2007–08 to 2017–18

Fig 9

 

Figure 10
LPG sales, 2007–08 to 2017–18.

Fig 10

REGIONAL ROADS AND INFRASTRUCTURE FUND

The Marshall Liberal Government is actioning its election plan to establish a Regional Roads and Infrastructure Fund to provide a dedicated funding stream for SA regions over the next 10 years. Each year, 30% of the State Government’s revenue from mineral and petroleum royalties is proposed to be paid into the fund. Current projections show that up to $750 million would flow to the regions over the next decade from establishment of this fund.

LAND ACCESS

Right to Negotiate: To date, the relevant registered native title claimants/holders, petroleum explorers and the State Government have concluded 55 land access agreements in relation to a total of 51 licence areas: 7 in the Arckaringa Basin; 37 in the Cooper Basin; 4 in the Eromanga Basin; 1 in the Officer Basin; and 2 in the Arrowie Basin.  All of these South Australian agreements cover the full cycle of petroleum activities including exploration, development and production.  An additional seven PEL applications are currently progressing through the Right to Negotiate process, pursuant to the Native Title Act 1993.

Conjunctive Indigenous Land Use Agreements (ILUAs): Considerable progress has been made through constructive negotiations involving industry, the SA Government and the South Australian Native Title Services Ltd to establish conjunctive ILUAs for the whole of the Cooper Basin. The essential terms of this ILUA have been agreed in principle, and in February 2007, the Yandruwandha/Yawarrawarrka peoples entered into the first petroleum ILUA in the South Australian Cooper Basin over approximately 40,000 km2.  This agreement also represented the first conjunctive petroleum ILUA in a productive province in Australia.

On 2 February 2012, a second conjunctive petroleum ILUA with the Wangkangurru/Yarluyandi people was registered with the National Native Title Tribunal.  Considerable progress has also been made to establish a similar conjunctive ILUA with the Dieri Native Title claimants.  To date, at least fourteen ILUA’s have been entered into with the Yandruwandha/Yawarrawarrka and Wangkangurru/Yarluyandi people of which 10 related to the granting of PELs in the Cooper/Eromanga Basins.

GISERA in the Otway Basin: The Government implemented a 10 year moratorium on hydraulic fracture stimulation to fulfil an election promise in 2018. To foster a constructive dialogue in the State’s South East, the South Australian Government has partnered with CSIRO’s Gas Industry Social and Environmental Research Alliance for a three year in-depth study. GISERA will engage local stakeholders as well as industry and regulators to research social and environmental issues related to natural gas operations (https://gisera.csiro.au/project/community-well-being-and-attitudes-to-conventional-gas/).

Gas Incentivisation - PACE Gas Grants

Two rounds of PACE Gas grants totalling $47.8 million were paid to companies in 2016-17 and 2017-18 (Table 3 and Figure 5).  These grants support a strong and diverse portfolio of projects in the Cooper and Otway basins that are expected to result in more than $223 million of industry co-funding.

PACE Gas aims to bring forward industry investment that will increase the supply of locally produced and competitively priced gas to South Australian markets. The PACE Gas Grants target 217 peta-joules (PJ) with upside potential to unlock more than 1,950 PJ of South Australian gas. Round one aims to deliver additional gas to markets by end 2019, Round two by end 2020.

DEM’s Energy Resources Division is monitoring progress on the current nine grant-funded projects. Round 1 projects must deliver gas by end-2019 and Round 2 by end 2020.  Early production results from PACE Gas supported projects include over 1000 tera-joules (TJ) or 1 peta-joule (PJ) of natural gas produced for South Australian customers in the 12 months since February 2018.

Highlights so far include:

  • Beach Energy’s Haselgrove 3 has discovered a very significant Otway Basin new gas field with an 87 PJ contingent resource.
  • Senex Energy’s Gemba 1 has discovered a new gas field in the Cooper Basin.
  • Santos operates two supported projects in the Cooper Basin for re-fracture stimulation and underbalanced drilling, which are both now producing gas to South Australian markets.
  • The Senex-Santos-Beach Vanessa East Pipeline began delivery of gas in July 2018. The gas is being sold under a Gas Supply Agreement to Pelican Point Power Ltd for use in South Australia including the gas-fired Pelican Point Power Station.

For more information: https://www.energymining.sa.gov.au/petroleum/latest_updates/pace_gas

Table 3. PACE Gas grant program - rounds 1 and 2 combined

Round PACE Gas grant PACE Gas grant recipient(s) projectStatus
1 A$5.82m Senex/Santos Cooper Basin PE and Vanessa pipelines gas production
1 A$6.00m Beach Energy Otway Basin Haselgrove #3 exploration gas discovery
1 A$2.00m Strike/Australian Gasfields Cooper Basin deep coal pilot in progress
1 A$3.96m Santos/Beach Cooper Basin re-frac stimulation gas production
1 A$6.00m Santos/Beach Cooper Basin underbalanced drilling in progress
2 A$6.00m Santos/Beach Cooper Basin Moomba heat recovery scheduled
2 A$6.89m Cooper Basin Gemba 1 exploration gas C&S gas discovery. Flow tests are scheduled, Resource/reserves TBA
2 A$5.26m Beach/Cooper Otway Basin Dombey 1 exploration scheduled
2 A$4.95m Vintage/Rawson Otway Basin Nangwarry exploration scheduled
 A$47.78m 

H3

Haselgrove 3. Photo courtesy of Beach Petroleum.

Commonwealth Gas Acceleration Program

The PACE grant program has been followed nationally with the Australian Government’s Gas Acceleration Program (GAP) which aims to stimulate new gas supplies into the eastern Australian market. On 28 March 2018, it was announced that Beach Energy were successful in their application for $6 million of Gas Acceleration Program funding from the Federal Government to construct a new $22.6 million Katnook Gas Processing Facility with 10TJ/day processing capacity. The new gas plant will accelerate supply and increase competition in the local market and help facilitate exploration of other targets in the region including two PACE Gas grant part-funded Otway Basin exploration wells (Figure 5): https://minister.industry.gov.au/ministers/canavan/media-releases/new-east-coast-supply-gas-acceleration-program.

The Roundtable for oil and gas in South Australia

The Roundtable for Oil and Gas Projects in South Australia was formed in 2010 and currently comprises over 2250 representatives from over 1150 organisations comprising industry, governments, peak representative organisations for industry, environment protection and aboriginal people; research institutions & individuals. The aim of the Roundtable is to provide a forum for members to help inform the South Australian Government on the key priorities that will underpin the Roadmap of onshore and offshore oil and gas projects to foster sustainable and profitable projects.

For more information: https://www.energymining.sa.gov.au/petroleum/roundtable_for_oil_and_gas

At a meeting of the Roundtable held on 23rd November 2018 – attended by 162 members, renewed Working Groups (WGs) were convened to identify key priorities that will shape planned directions paper, oil and gas strategy and expanded Roadmap for Oil and Gas Projects in South Australia.
The new WGs will address the following topics:

  1. Legislation/Regulation
  2. Water
  3. Infrastructure
  4. Service sector and supply chain
  5. Productivity (e.g. operations, completions, decommissioning & rehab, enhanced oil recovery (EOR)
  6. Knowledge management
  7. Other issues

Membership of the Roundtable is free and open to all. If you would like to join the Roundtable, please register your interest to DEM.Petroleum@sa.gov.au

BG

Roundtable for Oil and Gas Projects in South Australia 2018 meeting: Barry Goldstein, Executive Director Energy Resources presentation.

Regulatory compliance

The Petroleum and Geothermal Energy Act is designed as an effective, efficient and flexible regulatory system for all exploration and production activities for petroleum, gas storage and geothermal resources onshore in South Australia, as well as the construction, operation and technical regulation of high-pressure transmission pipelines.

Key objects of the Act include:

  • protecting the public and the environment from risks inherent in activities regulated under the Act,
  • establishing appropriate consultative processes, both with people directly affected by activities regulated under the Act, and the general public, and
  • ensuring appropriate levels of security of natural gas supply.

DEM Energy Resources Division prepares an annual compliance report to report on the administration of the Act and the regulatory performance of the industries covered by the Act. Current and previous reports can be accessed here:
https://www.petroleum.dpc.sa.gov.au/legislation_and_compliance/compliance_and_monitoring

Significant SA petroleum anniversaries in 2019

SA Mines Department’s 125th Birthday

The Department for Energy and Mining is celebrating its 125th birthday this year. Back when Queen Victoria reigned and South Australia had been established for nearly 50 years, mines were operating and petroleum exploration had commenced. HYL Brown was appointed as the first Government Geologist in 1882 and established the Geological Survey. South Australian Parliament passed important legislation in 1886 and 1888 for the alienation of mineral rights to the Crown. Following investigations by the Public Service Commissioner in 1889-90, the Royal Commission on Mining in 1890 and the proclamation of the Mining Act of 1893, the Mines Department was established on 28 February 1894 to regulate and encourage the mining industry.

The formation of the Mines Department brought together functions already being undertaken by several different SA Public Service agencies. Interestingly the Geological Survey was not included in the original Mines Department, but the agencies were merged in 1912.

If you want to discover more about the Department’s 125 year history, Mr Bernie O’Neil, a historian at the University of Adelaide, wrote two books detailing the history of the South Australian Mines Department - In Search of Mineral Wealth covered 1836-1944 and Above and Below covered 1944-94. Historical information provided herein is sourced from In Search of Mineral Wealth.

This illustration dates from 1897  “The Miner – South Australia’s Hope’, a cartoon highlighting that mining could again save the Colony after drought impacted grazing and cropping, a global depression and high levels of unemployment in the 1880-90s ‘Charlie’ is Premier Charles Cameron Kingston (from In Search of Mineral Wealth).

The Miner

Illustration from 1897 “The Miner – South Australia’s Hope"

60th anniversary of Innamincka 1 drilling

Innamincka 1 was the first deep petroleum exploration well drilled in the Cooper Basin, it was also the first well drilled by the Delhi Australia Petroleum and Santos Limited Joint Venture. The well was drilled under the Petroleum Search Subsidy Act of 1957 which offered financial incentives to companies drilling in regions with petroleum potential. The Bureau of Mineral Resources (now Geoscience Australia) vetted applications, supervised operations, received a 1/3 slab of drill cores, samples and logs.

The Premier of South Australia, Sir Thomas Playford and Minister Lyell McEwin attended the pegging ceremony at Innamincka in February 1959. The well was spudded on 29 March 1959 and the rig was released on 27 November 1959.

PP

Arrival of Sir Thomas Playford at Innamincka for Spudding Ceremony at Number 1 Well.

Innamincka 1 drilled through the Eromanga Basin into the Cooper Basin and reached a total depth of 3852m in gently dipping Ordovician beds (Warburton Basin). Eleven drill stem tests were run and minor hydrocarbon shows were recorded in Eromanga Basin sandstones. A total of 35 cores were cut and can still be viewed today at the Department for Energy and Mining Drill Core Reference Library. Ten drillstem tests were run and recorded gas in water from the Permian section and oil cut mud in the Eromanga section.

The well was completed as a water well and was finally decommissioned in June 1988.
The well completion report can be accessed here: https://mer-wcr.s3.amazonaws.com/INNAMINCKA 001.zip

50th anniversary of the Moomba-Adelaide Pipeline

The Moomba to Adelaide Pipeline was officially opened fifty years ago by Premier Steele Hall on 28 November 1969. Pipe laying had commenced on 24 October 1968 when Premier Hall turned the first sod near the Para River, north of Adelaide. This massive project also required construction of a gas processing plant at Moomba where condensate, ethane CO2 and water are removed from the natural gas to meet pipeline specifications. The Moomba-Adelaide Pipeline was the only transmission pipeline transporting gas into Adelaide until the SEAGAS pipeline commenced operation in 2004. The 781 km long pipeline is currently owned and operated by Epic Energy SA Ltd.

Booborowie

Booborowie downstream Petrosleeve installation on the Moomba-Adelaide Pipeline, 2017.

You can read more about over 150 years of petroleum exploration and production history in South Australia here https://www.energymining.sa.gov.au/petroleum/exploration_and_development/historical_highlights

For more information, contact:

Elinor Alexander
Director Geoscience & Exploration Branch
Energy Resources Division

+61 8 8429 2436
elinor.alexander@sa.gov.au