Mr SETTER - 1997-04-23
Several exciting announcements have been made recently about developments in the Timor Sea, including the $1000m Laminaria/Corallina field. What action is the Territory government taking to maximise the benefits to the Territory of this massive exploration and development program?
ANSWER
Mr Speaker, the amount of exploration and development occurring in the Timor Sea is certainly accelerating at an extraordinary pace. Exploration is forecast to exceed $1000m in the next 5 years. It is also worthy of note that some 30 exploration wells are being drilled in 1997-98 alone, at an estimated cost of more than $300m. In addition, developments worth between $3000m and $8000m are forecast to proceed over the next 5 years. The Laminaria/Corallina field is being developed at a cost of $1000m by a consortium led by the Woodside group. The Bayu/Undan field is expected to proceed in the near future and other similar developments such as Elang/Kakatua are also under way. The reason for this surge in activity is largely the success rate of exploration wells in the Timor Sea. The rate is an astounding 30% of the wells drilled. In other words, 1 in 3 exploration wells are actually producing a result. That is 3 times the rate that is considered acceptable internationally.
Until such time as these resources are brought to shore for processing purposes - and that time is certainly fast approaching - the primary benefit for the Territory is in providing supplies and services. I have been working very closely with my department, with the minister responsible for DARTI and with representatives of the operators and suppliers to maximise the benefits to the Territory economy from the resources off our coast. Among other initiatives, my department has commissioned a survey of the actual level of Territory content in supplies and services which are purchased by petroleum companies operating in our region. The industry itself has taken an initiative in developing a stronger focus for the petroleum industry in the Territory through existing networks such as the Minerals Council. The Department of Mines and Energy is ensuring that there is a very close dialogue with industry to encourage local businesses to take up the opportunities afforded by the offshore boom. My department is sponsoring a second oil supply and service seminar during the NT Expo week to bring together oil companies, major contractors and local businesses.
What the Territory also needs urgently, to improve our response to the offshore petroleum industry, is a Darwin offshore supply base. In recognition of this, the government recently invited a range of Territory, national and international companies to submit proposals to build and operate an offshore supply base. I table a copy of the invitation document. I urge
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honourable members to make themselves conversant with it. The closing date for proposals is 30 May. The aim is to have the proposals assessed formally and to get work under way before the end of this year. This time frame has been designed to coincide with the expected commissioning of the $80m first stage of the East Arm port at the end of this year and the rapid build-up in Timor Sea activity which is happening now. Already, a number of suppliers and operators in Darwin are working very hard at supplying expertise to the oil industry. It certainly looks very exciting. We have identified 6 potential sites in and around the new port for companies to consider in developing their proposals. Those sites have been laid out in the document I have tabled. They fit in with our port development project.
The invitation has been sent to companies with a known interest in the Darwin offshore supply base proposals. Those range from local companies to experienced operators in the Asian region. Much of the oil industry has been serviced out of Singapore and the South-East Asian region for a number of years. At present, the price of land in Singapore is rising very rapidly. The value of many of the onshore base sites for offshore production is becoming increasingly high. The Singaporean government is looking at other uses for that land. The activity in the Timor Sea is much closer to Darwin than any other centre in the South-East Asian region. Obviously ...
Mr Coulter: Can we run that argument past Timor?
Mr MANZIE: The Minister for Transport and Works points out that Timor itself is closer to the site. However, I believe that we have a greater ability to provide the communications, transport and other services of a very sophisticated nature that the offshore supply base companies would need to operate their business successfully. We believe that we could provide a better service here. So far, all the Timor Sea operations have been Darwin-based and the government aims to ensure that Darwin remains northern Australia's supply service base.
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ANSWER
Mr Speaker, the amount of exploration and development occurring in the Timor Sea is certainly accelerating at an extraordinary pace. Exploration is forecast to exceed $1000m in the next 5 years. It is also worthy of note that some 30 exploration wells are being drilled in 1997-98 alone, at an estimated cost of more than $300m. In addition, developments worth between $3000m and $8000m are forecast to proceed over the next 5 years. The Laminaria/Corallina field is being developed at a cost of $1000m by a consortium led by the Woodside group. The Bayu/Undan field is expected to proceed in the near future and other similar developments such as Elang/Kakatua are also under way. The reason for this surge in activity is largely the success rate of exploration wells in the Timor Sea. The rate is an astounding 30% of the wells drilled. In other words, 1 in 3 exploration wells are actually producing a result. That is 3 times the rate that is considered acceptable internationally.
Until such time as these resources are brought to shore for processing purposes - and that time is certainly fast approaching - the primary benefit for the Territory is in providing supplies and services. I have been working very closely with my department, with the minister responsible for DARTI and with representatives of the operators and suppliers to maximise the benefits to the Territory economy from the resources off our coast. Among other initiatives, my department has commissioned a survey of the actual level of Territory content in supplies and services which are purchased by petroleum companies operating in our region. The industry itself has taken an initiative in developing a stronger focus for the petroleum industry in the Territory through existing networks such as the Minerals Council. The Department of Mines and Energy is ensuring that there is a very close dialogue with industry to encourage local businesses to take up the opportunities afforded by the offshore boom. My department is sponsoring a second oil supply and service seminar during the NT Expo week to bring together oil companies, major contractors and local businesses.
What the Territory also needs urgently, to improve our response to the offshore petroleum industry, is a Darwin offshore supply base. In recognition of this, the government recently invited a range of Territory, national and international companies to submit proposals to build and operate an offshore supply base. I table a copy of the invitation document. I urge
Page 2049
honourable members to make themselves conversant with it. The closing date for proposals is 30 May. The aim is to have the proposals assessed formally and to get work under way before the end of this year. This time frame has been designed to coincide with the expected commissioning of the $80m first stage of the East Arm port at the end of this year and the rapid build-up in Timor Sea activity which is happening now. Already, a number of suppliers and operators in Darwin are working very hard at supplying expertise to the oil industry. It certainly looks very exciting. We have identified 6 potential sites in and around the new port for companies to consider in developing their proposals. Those sites have been laid out in the document I have tabled. They fit in with our port development project.
The invitation has been sent to companies with a known interest in the Darwin offshore supply base proposals. Those range from local companies to experienced operators in the Asian region. Much of the oil industry has been serviced out of Singapore and the South-East Asian region for a number of years. At present, the price of land in Singapore is rising very rapidly. The value of many of the onshore base sites for offshore production is becoming increasingly high. The Singaporean government is looking at other uses for that land. The activity in the Timor Sea is much closer to Darwin than any other centre in the South-East Asian region. Obviously ...
Mr Coulter: Can we run that argument past Timor?
Mr MANZIE: The Minister for Transport and Works points out that Timor itself is closer to the site. However, I believe that we have a greater ability to provide the communications, transport and other services of a very sophisticated nature that the offshore supply base companies would need to operate their business successfully. We believe that we could provide a better service here. So far, all the Timor Sea operations have been Darwin-based and the government aims to ensure that Darwin remains northern Australia's supply service base.
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Last updated: 09 Aug 2016