Oil Discovery off Coast of Western Australia Biggest in Decades

A US-based oil and gas exploration and production company made an exciting discovery off the coast of Western Australia. Apache Corp has come across one of Australia’s largest oil discoveries in decades.

The Canning Basin exploration well, Phoenix South 1, could contain as much as 300 million barrels of crude. Testing done at the site by Apache Corp has confirmed at least four different oil columns in seabed rocks (at depths of 436 feet). These columns range in thickness from 85 feet to 151 feet and have produced six light samples recovered from three intervals for Apache Corp.

"The oil and reservoir quality we have seen point to a commercial discovery," said Thomas E. Voytovich, an Apache senior executive. "If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia."

Throughout Australia, oil reserves have been diminishing at a rapid pace for several years. Production has decreased in the last to a rate not seen since 1972 – 416,000 barrels a day. The discovery, however, was made in an area that was abandoned years ago by several other international energy companies, whose exploration wells had turned out to be dry.

Apache Corp believes that several of the large structures around Phoenix South could potentially contain substantial amounts of oil. If more can be found in this area of Australia, the oil industry could turn around from its 13-year decline.

The company is looking to drill more exploration wells next year. In the meantime, they will focus on further confirming the actual amount of their discovery.

"It will take two to three months to work out the actual recoverable volumes from the discovery," said Simon Andrew, an energy analyst at Perth-based broker Hartleys.

Information sourced from the Wall Street Journal.