Global giant venturing into energy’s new frontier

GLOBAL energy giant ExxonMobil has teamed up with Ignite Energy to make its first foray into Australia’s CSG sector.
One of the five largest publicly owned oil and gas companies in the world, ExxonMobil holds an initial 10 per cent interest in exploration licence EL 4416, in Victoria’s Gippsland Basin. Locally based Ignite is the operator of the joint venture, holding the remaining 90 per cent of the tenement.
“Over the next few months, the companies are hoping to explore natural gas and deeper coal seams in the basin and evaluate its potential,” ExxonMobil and Ignite stated in a joint media release.
The JV partners will survey the methane gas reserves occurring naturally within about 16 billion tonnes of brown coal in the basin.
“In the following 12-18 months we will work to gather five to seven core samples and test the characteristics of the coal,” the companies stated.
“We will need to extensively evaluate and assess these results before deciding whether to proceed with any further exploration or field activity.”
Biogenic CSG is stored within coal seams by hydrologic pressure – gas is released when water pressure is removed, which can negate the need to use hydraulic fracturing. ExxonMobil has stated that it hopes to avoid the use of hydraulic fracturing, but would not rule the process out completely.
“Hydraulic fracturing may not be necessary to produce gas from Gippsland’s coal seams,” the companies stated.
“Part of our evaluation activities… will be to determine the best way to produce the gas and whether hydraulic fracturing will be needed, should we proceed to gas production.”
Hydraulic fracturing is only used in about half of the CSG wells in Australia, as many coal seams already have natural fractures.
ExxonMobil’s investment into the Gippsland Basin marks a shift in the company focus. EL 4416 is an extensive license, covering an area of more than 3800 square kilometres and, while EL 4416 is one of ExxonMobil’s first onshore unconventional gas ventures, the company has operated conventional oil and gas programs in the Bass Strait for nearly 50 years.
ExxonMobil reported that it hoped to use the geological data collected from the Bass Strait to help assess unconventional gas potential onshore: most of the Gippsland Basin is within Bass Strait, with the rest on mainland Victoria.

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