Santos has been given the green light by the State Government for further exploration in the key gas-producing Surat and Bowen basins.
Santos has joined forces with Shell in a 50-50 partnership to explore an area of about 400sq km near Surat.
The company said the area was immediately south of the Wallumbilla hub, meaning the joint venture could take advantage of existing infrastructure, therefore lowering development costs and accelerating the delivery of natural gas to the domestic market.
Exploration will target natural gas in deep sandstone reservoirs of the Bowen Basin, beneath the Surat Basin.
The company said if the results were positive, the joint venture would potentially unlock a new gas supply for the Australian east coast domestic market.
“As Australia’s lowest-cost onshore natural gas developer, I am very pleased that Santos will be the operator to develop these blocks exclusively for the domestic market because low-cost supply is the best way to put downward pressure on gas prices,” Santos chief executive Kevin Gallagher said.
Meanwhile, Armour Energy Limited has announced that it has won State Government approval to explore for petroleum on the Roma Shelf in the Surat Basin.
The company said the area to be explored was considered highly prospective for gas and liquids.
“The award of this tenure adds to our plans for the reinvigoration of the large Permian gas and condensate plays of the Surat Basin,” Armour Energy’s chief executive Roger Cressey said.
“Our current activities are demonstrating that the conventional reservoirs of the Surat still have a long-term future in producing oil and natural gas for eastern Australia.”