Although Coal Seam Gas (CSG) has grabbed the headlines in Queensland, conventional gas exploration is continuing successfully with reserves being added to the state’s inventory. Higher oil prices have also led to an upsurge in exploration for oil. After years of declining oil production in Queensland there was an increase in production in 2003/04.

Oil exploration has been focussed on existing leases and ATPs, particularly in the Cooper/Eromanga basins. Mulberry-1 was a recent discovery. The first native title agreement in the southwest was signed in June 2005, with other agreements being negotiated. As the agreements are signed, there will be an upsurge of exploration for oil. There is also an increase in requests for seismic data in the Eromanga Basin. In the Bowen/Surat basins, exploration has focussed on fringe areas or targeted old oil fields. The main addition of oil reserves in the Bowen/Surat basins is condensate associated with gas.

Gas exploration and development has focussed on the Cooper Basin gas fields and the Bowen/Surat basins. Santos Limited continues to add reserves in the Cooper Basin and to develop new and existing fields. In the Bowen/Surat Basin the Tinowon play remains a priority target, with continued drilling with recent significant addition of reserves due to innovative drilling techniques to extract gas from sandstones containing reactive clays. It is difficult to estimate the total reserves likely to be found because of the heterogeneous distribution of the reservoir sandstones. New seismic has been acquired using dynamite as a source, and large amounts of seismic data are being interpreted. The techniques applied to the Tinowon play can be applied to other reactive sandstones in the Bowen Basin.

The Petroleum and Gas (Production and Safety) Act 2004 came into force on January 1st 2005. As part of the new legislation, exploration permits tenure will be released through a tendering process. The first land releases should be later this year once the administrative processes have been put in place. The petroleum industry continues to be major users of the Department of Natural Resources and Mines online information systems, Queensland Digital Exploration Report System (QDEX), and Interactive Resource and Tenure Maps (IRTM). More than 90% of well completion reports have now been scanned and are available on the system.

The PNG pipeline is now undergoing an engineering feasibility study with a decision to be made next year. At this stage there appears to be enough customers in Queensland, Northern Territory and the southern states to enable the pipeline to proceed. Another pipeline that has been proposed is one from Wallumbilla to Newcastle. The proposal is to use Queensland coal seam gas to underpin the pipeline. The pipeline would then stimulate the development of coal seam gas development in northern New South Wales.