Wednesday 23 May 2018

Falcon expects serious drilling in 12 months as Australia fracking ban lifted

Australia, one of the world's biggest shippers of liquefied natural gas and coal, has struggled in recent years with fuel and power supplies as the nation tries to balance environmental concerns and domestic needs against revenue and jobs from energy exports (stock picture)
Australia, one of the world's biggest shippers of liquefied natural gas and coal, has struggled in recent years with fuel and power supplies as the nation tries to balance environmental concerns and domestic needs against revenue and jobs from energy exports (stock picture)
Gavin McLoughlin

Gavin McLoughlin

Falcon Oil & Gas expects serious drilling activity to begin in 12 months' time at its major prospect, where a government ban on fracking has been lifted, enabling the project to proceed.

The prospect, in Australia's Northern Territory, had been put into abeyance after the moratorium was established.

The ban was lifted last week, but Falcon boss Philip O'Quigley said a new permitting process put in place will take three to six months to complete. In addition, monsoon-like weather will also delay the process, pushing a planned five-well programme back into 2019. The programme will be carried out in conjunction with Falcon's partner in the project, Australian business Origin.

Well tests carried out prior to the moratorium indicated what Falcon called "a very promising material gas resource".

The company is now free to seek to exploit the gas on a commercial basis. Northern Territory Chief Minister Michael Gunner, who lifted the fracking ban, admitted he could face a backlash from voters. "There are people who believe passionately on this issue one way or another. There comes a point in time, though, when you have to make a decision."

Fracking is controversial because opponents say there is a risk of groundwater contamination. It works by drilling into the ground and shooting rocks with a high-pressure mixture of water, sand and chemicals to release the resources inside.

A report commissioned by the Australian authorities found that "the challenges and risks associated with any onshore shale gas industry in the NT (Northern Territory) are manageable".

"The panel is of the opinion that with enactment of robust and rigorously enforced safeguards, the waters shall continue to flow "clear and cold out of the hills'."

Australia is home to the world's sixth-biggest reserves of shale oil and seventh-largest of shale gas, and the vast, remote Northern Territory remains in the early stages of exploration. The area "could have enough gas to serve Australia for almost 200 years", the nation's Resources Minister Matt Canavan said.

Australia, one of the world's biggest shippers of liquefied natural gas and coal, has struggled in recent years with fuel and power supplies as the nation tries to balance environmental concerns and domestic needs against revenue and jobs from energy exports.

(Additional reporting Bloomberg)

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