Is this the answer to Australia’s oil production crisis?

• Could a stranded offshore discovery help overcome Australia’s oil supply problem?
• Early studies suggest it could potentially triple the nation’s oil production numbers
• Key offshore drilling campaign set to kick off in 2027
• Potential for more than a billion barrels of oil and almost 800 Tcf of gas identified

The current Middle East crisis has again highlighted Australia’s perilous oil stocks. Gas rich, oil poor Australia remains heavily reliant on crude imports to meet its oil demands at a time when international stocks are declining, and prices are rocketing.

When concerns about Australia’s oil supplies intensified earlier this year, one question stood out: does Australia produce enough oil to fuel its own needs, and if not, can domestic production be increased?

Recent research reported by the AFR highlighted Australia’s oil production halved over the past 12 months, reinforcing the countries heavy reliance on imported petroleum and diesel, at a time when global supply is being significantly impacted.

The supply concerns have also prompted the Australian government to work with our Asian neighbours to bolster the countries energy security.

The questions also highlighted the concerns around Australia’s domestic crude supply and refining capacity.

Australia’s reported June-quarter offshore crude production was approximately 35,000 barrels per day (2.9 million barrels for the quarter), underscoring the scale of the challenge at a time when the country remains heavily reliant on imported oil and refined product.

However, as delegates at the Good Oil conference in Perth heard last week, there is an asset that could make a significant contribution to Australis domestic crude oil production.

Carnarvon Energy (ASX: CVN) CEO Philip Huizenga, told delegates that studies indicate the Dorado field off the north-west coast of Western Australia has the capacity to produce 60,000 barrels per day.

Discovered in 2018 in the remote Bedout Sub-basin, Dorado is regarded as Australia’s largest undeveloped oil field project – estimated to hold around 162 million barrels of light oil and condensate, on a gross 2C basis.

Located about 150 kilometres off the coast, Dorado’s remote location, coupled with declining oil prices and margins at the time, saw the project’s progress stalled by operator Santos (ASX: STO).

Now, with energy security back in focus, Santos and Carnarvon have rejuvenated plans to commercialise the regionally significant field.

Mr Huizenga said that while progress on developments and exploration in the Bedout was paused in January last year, geopolitical developments and renewed energy-security focus have brought Dorado back to the forefront of Carnarvon’s focus, with the project described as ready to restart.

Completed front-end engineering and design (FEED) work shows that the Dorado field can comfortably produce approximately 60,000 barrels of oil per day – significantly lifting Australia’s domestic oil stocks.

Previous studies have also identified a cost-effective development option that could bring Dorado oil online relatively quickly.

FEED has focused on the use of a redeployed floating production storage and offloading (FPSO) vessel and a conventional piled wellhead platform.

Upgraded studies have also identified the potential to significantly reduce the number of development wells required, lowering Capex and shortening the development timeline – resulting in the potential to see first oil three years after FID.

And the Bedout players have also identified significant potential to add additional oil and gas resources to Australia’s declining production.

3D seismic has been a game changer on the North West Shelf to the south of the Bedout and Carnarvon and its JV partners are now set to take advantage of the significant amount of 3D data available over the Sub-basin.  

Exploration in the Bedout Sub-basin has achieved high success rates (~67%) since the application of modern high-quality 3D seismic

Detailed analysis of the modern 3D data has identified numerous prospects and targets – with the Ara prospect in particular – generating great excitement. 

Located approximately 80 km north of Dorado, Ara is expected to be the first well drilled in a program featuring the targeting of approximately 200 million barrels of oil equivalent and testing both oil and gas plays in the northern acreage.

Santos has contracted the Transocean Equinox semi-submersible mobile offshore drilling unit for its upcoming exploration and appraisal campaign, which includes up to two wells in which Carnarvon has an interest in. 

The Ara well will mark the long-awaited return of exploration in the Bedout Sub-basin, Australia’s most prospective, liquids-rich basin, with drilling expected to commence from April 2027.

Carnarvon estimates its net prospective resources in the Bedout Sub-basin to be 1.02 billion barrels of oil equivalent.

Alongside Ara, the Wallace, Wendolene, Starbuck and Pavo South prospects have all been identified as part of the wider exploration portfolios. the five prospects estimated to contain a combined material resource of 623 million barrels of oil equivalent (mmboe), comprised of 1.52 trillion cubic feet (Tcf) gas and 352 million barrels of oil.

An additional 7.78 Tcf and 1.25 billion barrels are estimated to be present in the exploration clusters delineated for potential tieback. 

As has been demonstrated in previous remote developments, establishing infrastructure can help accelerate the delivery of new reserves and reduce development costs, potentially improving economics of bringing additional discoveries into production.

Be on the look out for the next feature piece in our series, “Is this field the answer to WA’s looming gas crisis?”

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