U.S. oil and gas producer Chevron Corp announced its Australian subsidiary, Chevron Australia, has uncovered more natural gas in its Carnarvon Basin, in the greater Gorgon area, off the coast of Western Australia.
The Satyr-2 discovery, located 75 miles northwest of Barrow Island, marks as its 15th in Australia since mid-2009, the company said. It gave off a confirmed net gas pay of 128 feet or 39 metres.
"This new discovery in the Greater Gorgon Area further highlights the quality of Chevron's exploration capability in the region and the significance of Australia to Chevron's energy portfolio," Chevron's vice chairman, George Kirkland, said in a statement, noting the discovery could very much anchor the company's future expansion plans in its liquefied natural gas (LNG) projects in Australia.
Chevron, currently constructing its $43-billion Gorgon LNG project, is also working on the $29-billion Wheatstone LNG project near Onslow.
"The continued exploration success in the Carnarvon Basin could help underpin expansion opportunities at our LNG projects in Australia and support our drive to become a leading supplier of liquefied natural gas to world markets and domestic gas to Western Australia," said Melody Meyer, Chevron Asia Pacific exploration and production president.
Credit Suisse had estimated the project capex for Gorgon as well as could reach $47 billion and $35 billion, respectively.
"Australia represents a major investment. To generate a return above 10 per cent, each project will need to deliver substantial cashflow. More important than the annual cashflow contribution, each Australian LNG project has a long life of plateau production at around 40 years," Credit Suisse said.