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ECONOMICS LEGISLATION COMMITTEE
RESOURCES, ENERGY AND TOURISM PORTFOLIO
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ECONOMICS LEGISLATION COMMITTEE
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ECONOMICS LEGISLATION COMMITTEE
(Senate-Wednesday, 20 October 2010)
INNOVATION, INDUSTRY, SCIENCE AND RESEARCH PORTFOLIO
Australian Nuclear Science and Technology Organisation
Office of the Chief Scientist
Commonwealth Scientific and Industrial Research Organisation
Australian Research Council
Department of Innovation, Industry, Science and Research
- Australian Nuclear Science and Technology Organisation
- RESOURCES, ENERGY AND TOURISM PORTFOLIO
Australian Prudential Regulation Authority
Department of the Treasury
Mr Di Giorgio
Australian Bureau of Statistics
- Australian Prudential Regulation Authority
- INNOVATION, INDUSTRY, SCIENCE AND RESEARCH PORTFOLIO
Content WindowECONOMICS LEGISLATION COMMITTEE - 20/10/2010 - RESOURCES, ENERGY AND TOURISM PORTFOLIO - Geoscience Australia
CHAIR —Dr Pigram, do you have an opening statement that you would like to make?
Dr Pigram —I do not have an opening statement.
Senator BUSHBY —I have only a few questions, so we will not hold you for too long. In your answer to question on notice No. BR 4 you quoted Dr Trevor Powell in the report Discovering Australia’s future petroleum resources: the strategic geoscience information role of government, saying that Australia has over 50 sedimentary basins of which only 12 are producing oil or gas. In your assessment of the remaining 38 basins, do they have oil and gas prospectivity and, if so, how high?
Dr Pigram —We have not examined all of those basins and a number of them we are working on, and part of our task is to examine the potential in the frontier basins of Australia with a view to attracting exploration activity to test that potential.
Senator BUSHBY —You say you have not examined or assessed all of them. Have you assessed any of them?
Dr Pigram —We have not examined all 38. We are in the process of examining some of them.
Senator BUSHBY —So beyond the 12 that are currently producing gas, are any of those 38 ones that you have actually assessed to your satisfaction at this point?
Dr Pigram —We think some of them have potential and they are part of the acreage release program and they have attracted exploration investment. So there is a process underway to test that potential.
Senator BUSHBY —I want to get a sense of potentially what is out there. If you have looked at 10, did you find that five of them looked pretty good or did you find eight or two? Of those 38 that are not currently producing, how many have you actually looked at in more detail? Of those, in how many did you find a high degree of prospectivity?
Dr Pigram —Can I take it on notice and I will provide you with a more detailed explanation of where we have been and where we think the potential is?
Senator BUSHBY —Okay; thank you. You also note from the same report that by area less than a quarter of Australia’s onshore and offshore basins have received exploration activity. In respect of the quarter that have, what prospect exists for those basins to produce oil and gas?
Dr Pigram —I will take it on notice again and provide you with a detailed answer.
Senator BUSHBY —You will probably have to do the same with the next one. With respect to the remaining 75 per cent that have not received exploration activity, what is your assessment of their prospectivity? Is it as good or equivalent to those with proven prospectivity or those already producing? I am also interested in why they have not been explored yet.
Dr Pigram —I can answer that one more generally for you. Essentially those basins tend to be older rocks. They are the ones that we believe have far less potential, and clearly that assessment is shared by the industry because they have not chosen to go to those areas. So I think the prognosis longer term is that they do not have great potential and unless there is some development in understanding of the geosciences whereby some unconventional resources exist they have very little potential.
Senator BUSHBY —So that is the absolute answer in that sense? I recall Geoscience Australia giving some evidence a few years back about how there were a handful of test rules in the Great Australian Bight that have been put in but in an area the same size in the Gulf of Mexico there were 2,500 or something like that. Is it just that we have not got to it yet or that the industry has not got to it or is it because, as you say, it really does not look like it holds out the prospects that other areas around the world do?
Dr Pigram —It is a combination of all of those factors. The geological history as we understand it would suggest that they do not have great potential, but they have not been tested fully. Again, for the industry to test them they have to have enough information to see that there is some potential and something that is worth testing.
Senator BUSHBY —And in some of those areas you have not got to it yet.
Dr Pigram —We have not or the industry in their own assessment have decided that it is not appropriate either. Either they are very old and the wrong sorts of rocks or they are just not the right environments to have good potential.
Senator BUSHBY —You mentioned the acreage release program a minute ago, and I have read that in some other things. How does that actually work? I am not sure how you release it. Do you identify areas that you release or does the industry come to you and ask?
Dr Pigram —In the offshore area it is a consultative process. We listen to industry about what they might be interested in having released. It is an annual process. The minister releases the areas at the APPEA conference each year, usually around April or May. The process for selecting the areas that go up for release is based on work that we have done in the precompetitive role that we have and we identify areas where industry is not active or we think there may be potential and we put those forward for industry to consider.
Senator BUSHBY —So there is no limit imposed on what you are releasing other than the information that you know about the areas essentially?
Dr Pigram —Yes. There has to be sufficient information for it to be attractive for the industry then to do their own due diligence on whether or not they may want to invest in those areas.
Senator BUSHBY —So a basin out there that has not been explored and has not been properly assessed by you is unlikely to be released because nobody knows anything about it, not because you are holding it in reserve or you are—
Dr Pigram —There are very few basins that we do not know something about; I would suggest none, in fact. We have some sense of what the potential is. Part of the recent program that we have undertaken has been in those very remote frontier areas, because in terms of a lot of the shallower near-shore basins we have done a substantial body of work in them and we do have a good understanding of them. The ones that are in the deeper water or more remote areas are the ones that we have been targeting for exactly those reasons because we have not been there previously.
Senator BUSHBY —Just a final question from the perspective of a Tasmanian senator. With regard to the Sorell Basin, is that one that is being looked at at all by you?
Dr Pigram —It has.
Senator BUSHBY —It has been looked at?
Dr Pigram —It has been looked at.
Senator BUSHBY —What did you decide in terms of its prospectivity?
Dr Pigram —It has been subject to the acreage release process that has been put into the system and put in front of companies as a potential site for a future—
Senator BUSHBY —Is there any interest?
Dr Pigram —I would have to take that on notice, Senator, if I could. I could tell you the outcome of that process.
Senator BUSHBY —Good. Thank you.
CHAIR —That is it for Geoscience. Thank you, Dr Pigram.
Dr Pigram —Thank you.