May 15 (Bloomberg) -- ConocoPhillips, the third-largest U.S. oil company, said it’s interested in further shale investments in Australia following a partnership last year with Perth-based New Standard Energy Ltd.
“We’re chasing a bunch of stuff,” Todd Creeger, president of Conoco’s Australian unit, said today in an interview in Adelaide. “There are some large acreage holders interested in talking to us about what we could do together. New Standard was a good entry. We’ll see more of that.”
The Canning Basin in Western Australia, where New Standard Energy and ConocoPhillips are exploring, is at the top of the Houston-based company’s list, Creeger said. The Cooper Basin in central Australia also has potential, he said.
Conoco, Hess Corp., BG Group Plc and Mitsubishi Corp. have agreed to fund shale exploration campaigns through ventures in Australia. With explorers including Santos Ltd. and Beach Energy Ltd. holding pieces of an estimated 400 trillion cubic feet of recoverable shale-gas resources, Australia is poised to commercialize its acreage on a “large scale,” according to the U.S. Energy Information Administration.
Acquiring shale oil and gas acreage in Australia will grow more expensive over time, Creeger said, declining to be specific about assets in which Conoco may be interested. Conoco is more focused on shale oil than gas, he said.
“The key is to get in early,” he said. “When you look at the history of the U.S. and how that shale has developed, the first movers have been the ones that from a business standpoint have been successful.”
Still, Australia’s shale industry faces obstacles and lacks enough drilling equipment, skills and pipeline infrastructure, Creeger said.
“In Australia it’s going to be more complicated,” he said. “Development will likely be slower than what you’ve seen in the U.S., but from a geology standpoint there’s no reason you wouldn’t see the same opportunity here.”
Conoco is Origin Energy Ltd.’s partner in a $20 billion liquefied natural gas project in Australia’s Queensland state and operates the Darwin LNG plant in the Northern Territory. Adding production at the Darwin project may depend on getting three or four companies to combine gas supplies, he said.
“We’re very interested in expanding Darwin,” Creeger said. “We haven’t found an anchor field for an expansion. There are options. None are of a size to underpin expansion.”
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