Oil Flows From Off-shore Well

Press, Volume CV, Issue 31011, 17 March 1966, Page 7

Oil Flows From Off-shore Well

(N.Z. Press Association—Copyright) SYDNEY, March 16. Oil flowed at commercial levels from a well 25 miles off the Victorian coast yesterday. The “Daily Telegraph” Finance Editor says in a lead story that because of the site’s nearness to refineries and markets this discovery of flow oil is one of the most significant yet made in Australia.

The floating rig ship Glomar 111 is drilling the well off the Gippsiana coast The well is known as East Gippsland Shelf No. 4 well.

Broken Hili Pty. Company, Ltd., and Esso Standard Oil of the United States are joint partners in the off-shore testing—the first of its kind in Australia.

The programme has already had successes, with two earlier East Gippsland Shelf wells encountering natural gas flows in commercial quantities. The No. 3 well in this series—farther out to sea than No. 1 and No. 2—was dry. Australia’s fifth off-shore well—also drilled by EssoB.H.P.—was 50 miles out into Bass Strait, and was known as Bass Strait No. 1. It also was dry. The president and general manager of Esso’s exploration company (Mr J. H. Hamlin) said production tests in E.G.S. 4 brought a flow of high gravity oil at rates ranging from 730 tn 930 barrels a day on various choke sizes. A flow of natural gas accompanied the oil flow at rates ranging from 750,000 to 1.2 m cubic feet a day. Mr Hamlin said analysis of flow data and step-out drilling would be necessary to determine the commercial importance of these recoveries. Step-out drilling would test the area around the No. 4 well. The No. 4 well is 28 miles east of the original No. 1 well, which flowed high rates of natural gas. It is understood that the No. 4 well is on a completely different structure to the No. 1 well. Mr Hamlin said that contrary to rumours, the No. 4 oil flow was the first flow of liquid hydrocarbons in the offshore series, except for the condensate accompanying the previously announced gas flows. The E.G.S. 4 well was drilled to 8500 feet. First tests of Che interval below 7500 feet in the well early in March produced a flow of natural gas ranging from 3.5 m to 11.5 m cubic feet a day. The latest flow of oil and gas came from the zone around 5000 feet in th; well. The well is situated on Tenement P.E.P. 38, which is held by B.H.P. through its exploration subsidiary, Haematite Exploration, Pty., Ltd. Esso Exploration is earning a 50 per cent interest in the tenement by conducting, at its expense, the exploration effort. B.H.P. has already announced that it will take up a 50 per l cent interest in the Gippsland Shelf No. 1 well area—instead of acquiring royalty rights, which was the alternative offered in the original contract with Esso. The decision last month by B.H.P. to share to the capital development of the natural gas find brought the commercial development of the gas nearer. Initially, platforms are expected to be built to the gas production zone off-shore, and connected to the mainland by pipeline. The pipes will probably cross the coast south of the

lakes district to East Gippsland.

A pipeline for gas already exists between Morwell in Gippsland and Melbourne. The discovery of oil in the Gippsland off-shore area has implications for the new oil refinery being built at Westernport, near Melbourne.

B.P. of Australia has built this refinery. It is on the Gippsland side of Melbourne, less than 150 miles from the site of the No. 4 well. The last announced estimate —in November—was that the refinery would be operating in April.

The flow rates of oil at E.G.S. 4 are not as high as the rates encountered originally in the Moonie wells in Queensland —Australia’s first commercial oilfield. Moonie wells in the discovery stage flowed at varying levels, ranging from 240 barrels a day (No. 13) to a record Australian flow of 2592 barrels a day (No. 2).