SA will survive Chevron exit: Treasurer

Beach Energy Cooper Basin shale webBy Rachel Dally-Watkins

April 7, 2015

FOLLOWING Chevron’s withdrawal from a shale venture in South Australia’s Cooper Basin, the state government has rejected suggestions that thousands of planned new jobs will never see fruition; instead claiming that other companies remained interested in investing in the region.

Beach Energy advised the market in late March that Chevron would not participate in Stage 2 of the Nappamerri Trough Natural Gas (NTNG) project.

“Chevron informed Beach that extensive technical evaluation has confirmed a large gas resource and potential for further appraisal,” Beach stated.

“However, at this time the opportunity does not align strategically with Chevron’s global exploration and development portfolio. Chevron’s spending on exploration is being high?graded and significantly reduced in response to market conditions.”

South Australian Treasurer Tom Koutsantonis was quick to point out that Chevron’s decision was not a reflection on the state or its resources.

“One person’s exit is another person’s entry point. Remember, the Cooper Basin is at the heart of the oil and gas revolution in Australia,” he said.

“There are pipelines headed to Queensland, Sydney, Adelaide and Melbourne coming out of the Cooper Basin. It’s going to be the heart and soul of the oil and gas revolution, and it’s not going anywhere.”

However opposition treasury spokesman Rob Lucas said the decision was another blow to the already struggling resources industry.

“This news, coupled with the latest ABS employment data showing the loss of 4400 mining jobs since last November, paints a bleak picture for people seeking jobs in the industry,” he said.

“The fact there has been a 26.9 per cent collapse in mining sector employment since November last year makes a mockery of Treasurer Tom Koutsantonis’ promise to create 5000 new jobs in the sector by 2017.

“Indeed the collapse in employment in the mining sector in South Australia has been underway for the last 12 months with a 22.2 per cent fall in jobs over that period of time.

“This decision by Beach and Chevron, together with other similar decisions such Santos’ recent announcement to cut 700 jobs, raises even more significant doubts about Mr Weatherill’s promised new oil and gas hub and controversial Gillman land deal,” Mr Lucas said.

All of Chevron’s interest in the NTNG project joint ventures will resort back to Beach; and no return of Stage 1 capital expenditure is payable by Beach to Chevron.

“Beach considers that the Stage 1 program, designed as an exploration phase, achieved its primary technical objectives,” Beach managing director Rob Cole said.

“We now better understand the geology through the delineation of target zones and identification of additional targets beyond the early REM shale play. We have also proved the ability to fracture stimulate, successfully flowed gas to surface and tested deliverability. We look forward to progressing the NTNG project at a pace consistent with prevailing market conditions.”