Exploration & Development

South Australia has a long history of petroleum exploration, extending back to 1866, when the first well was sunk adjacent to the Otway Basin in the search for oil. In the 1950s the early Palaeozoic sediments in the state’s NE were the focus of effort until gas was discovered in the overlying Permo Carboniferous section in the early 1960s (Cooper Basin). The Cooper and Eromanga basins, which span northeastern South Australia and South West Queensland, are now Australia’s largest onshore petroleum province. Over the last 50 years, exploration and development activity in South Australia has focused largely on this mature basin.

Gas and liquid pipelines throughout Australia are shown in this Figure (PDF) Cooper Basin gas supplies markets in South Australia, New South Wales, Queensland and Victoria via an extensive pipeline network. The Cooper Basin Liquids Project (1980–84) was initiated to market the oil and existing gas liquids. A liquids pipeline links Moomba to a processing plant and storage and export loading facilities at Port Bonython. Oil and gas fields of the Cooper and Eromanga basins are shown in this Figure (PDF).

The other basin in South Australia currently producing commercial hydrocarbons is the onshore Otway Basin, where gas was discovered in 1987. The Otway Basin remains a proven gas province, with potential on- and offshore oil plays in South Australia and Victoria, and in offshore Tasmanian waters. Large offshore gasfields were discovered in 2001 at Thylacine (Tasmania) and Geographe (Victoria), and in 2002 at Casino (Victoria).

Bona fide oil and gas shows have been recorded in the state’s early Palaeozoic basins, however, these remain underexplored by world standards. A major new phase of exploration is addressing this in the Officer Basin, where two explorers have conducted large regional 2D seismic surveys and the first drilling since 1985 occurred in 2010.

The unconventional hydrocarbon potential of South Australian basins includes shale gas, tight gas and hydrocarbons from coal, via coal seam gas, in situ gasification and Syngas processes.  Exploration for these new resources is at an early stage in the State, however significant potential exists and research by explorers and PIRSA to understand and evaluate new plays is progressing.

In a mature basin such as the Cooper, major effort is being focussed on these new plays in 2010-11. The first well to test shale gas potential in the Cooper Basin, Encounter 1, was drilled in the Nappamerri Trough by Beach Energy with second well (Holdfast 1) also being drilled, Santos has announced gas flows from coal seams, Stuart Petroleum has published resource estimates for a shale gas play in the Allunga Trough and Mettika Embayment, AGL has tested the Winton CSG play, Strike is testing the shallowest Permian coals for CSG in the southern Cooper Basin, and Santos continue to exploit tight gas. Linc Energy has been exploring in situ gasification of coal in the Walloway Basin and CSG in the Arckaringa Basin.

Historical highlights of South Australia’s petroleum exploration history can be viewed here

Maps showing petroleum tenements and geothermal tenements in South Australia. More information on holders of petroleum and geothermal tenements in South Australia is given in the Earth Resources Information Sheet P1.

Cooper and Eromanga basins

Exploration and development in the South Australian part of the Cooper Basin have taken place in five distinct phases. The first followed the discovery of gas at Gidgealpa in 1963. By 1969 gas from the Cooper Basin was piped 790 km to Adelaide. The second was the A$1.4 billion ‘liquids scheme’ in the early 1980s following Eromanga Basin oil discoveries and their combined development with that of liquids from the wetter gasfields. The third phase, which began in 1982, was the accelerated search for gas to ensure supplies for South Australia into the 21st century. This phase was partially completed in 1991, and in 1992 a 10-year contract was signed to supply gas to South Australia.

Oil and gas exploration in the Cooper–Eromanga peaked in February 1999 before the expiry of Petroleum Exploration Licences (PELs) 5 and 6, and to meet new market opportunities as the gas market became de-regulated. Santos undertook a three-year $200 million exploration program from 1996–98.

PIRSA held three releases of former PELs 5 and 6 acreage between 1998 and 2000, with a total of 27 new petroleum exploration licences offered. Cooper Basin petroleum acreage release results for 1998–2000 are given in the Earth Resources Information Sheet P7. The total expenditure contained in the winning bids over the first five years of the licences is forecast as A$201 million with a minimum of 103 exploration wells to be drilled. In November 2001 the first of the new licences were granted to the successful bidders in the CO98 acreage release following signing of a historic native title agreement.

In 2002 new Cooper Basin explorers began exploring their licences. Exploration levels continued to increase in the region with the conclusion in 2002–03 of a total of 27 access agreements for the CO98, CO99 and CO2000 acreage release areas. Another access agreement arose from the CO2003 release enabling grant of PEL 182 in 2005 and of PEL 218 in 2007.

In anticipation of the next Cooper Basin acreage release in 2009, negotiations opened in 2006 to develop a conjunctive Indigenous land access agreement (ILUA) for the South Australian Cooper Basin region already covered with land access agreements resulting from earlier RTN proceedings. These negotiations involve the Aboriginal Legal Rights Movement Inc., the three native title parties already familiar with the RTN process, the South Australian Government, and petroleum exploration and production company representatives (through the South Australian Chamber of Mines and Energy). Considerable progress has been made through constructive negotiations and the essential terms of this ILUA were agreed in principle and in February 2007, the Yandruwandha/Yawarrawarrka peoples entered into the first petroleum ILUA in the South Australian Cooper Basin over ~40 000 km2. This agreement also represents the first conjunctive petroleum ILUA in a productive basin in Australia. Negotiations are progressing with the two relevant Native Title claim groups for an ILUA in the balance of the Cooper Basin.   

Since January 2002 to end February 2009, 129 exploration wells and 45 appraisal/development wells have been drilled by the new explorers in the Cooper Basin. Most have targeted oil; however both oil and gas have been discovered. The new entrants found new pools in 63 of these wells (49% technical success rate) and 55 were cased and suspended as future producers (43% commercial success rate).

Otway Basin

The first economic gas discovery in SA and the Otway Basin was the Caroline CO2 field in 1967. The discovery of natural gas at Katnook in 1987 spurred on exploration and five gas fields were discovered. Otway Basin gas has been supplying local markets in the South East since 1991, although production is now declining. Economic oil discoveries remain elusive, although 21 wells have oil shows. Exploration around the Jacaranda Ridge 1 oil discovery commenced in mid-2007 with a condensate discovery at Jacaranda Ridge 2.  

Construction of the SEA Gas Pipeline, which was commissioned early in 2004, has doubled gas supply capacity into South Australian gas markets, creating more competition amongst gas wholesalers, and providing greater security of supply for South Australia.  

The OT2008 acreage release attracted eight applications totaling $41 million in work program bids, received at the close of bids on 27 November 2008.  Adelaide Energy Limited successfully bid for OT2008-B and D and Cooper Energy Limited won the bid for OT2008-C. Their work programs include $17.3 m of non-guaranteed work and $9.5 m of guaranteed work. 

Geothermal energy

The South Australian Government is leading Australia with expeditious and effective processing of activity approvals for geothermal energy, and the last few years have seen a rush for licences to explore a variety of geothermal energy plays. 

In August 2004 a change in policy enabled over-the-counter applications for geothermal exploration licences (GELs) to be accepted on lands anywhere in the entire state, except over current GELs or lands excluded from exploration (e.g. certain parks). This triggered enormous growth in the number of GELs and GEL applications (GELAs) in South Australia, from 3 in August 2004 to 248 at end of 2010. Whilst not all may eventuate, the aggregate investment for guaranteed and non-guaranteed research (exploration), proof of concept (appraisal) and demonstration (pilot development) in these 248 GELs and GELAs is estimated to be in excess of $1.2b for the 14-year term 2002–15, and that tally excludes deployment projects. This astounding growth corresponds to more than 70% of all licence applications  in Australia (at 31 December 2008). Indeed, to date, South Australia’s hot rock resource potential and supportive investment frameworks have attracted almost 100% of all investment in licenced geothermal exploration and proof-of-concept investment.


The Plan for Accelerating Exploration (PACE) is a five-year, A$22.5m project, with A$2m a year allocated for the collaborative drilling component — a total of A$10m over five years. In the first call in 2004, 47 proposals were received and 27 were granted funding totalling A$1.75m.

PACE funding is available for proposals from industry to undertake cooperative petroleum or geothermal exploration drilling projects, jointly funded by the proponent company and PIRSA. The primary aim is accelerated exploration success for South Australia. Five rounds of PACE drilling grants have been held: Rounds 2 and 3 (2005), Round 4 (2006) and Round 5 (2007) have included petroleum and geothermal projects.

Round 5 was announced in August 2007. PIRSA received 66 proposals and $2m in grants were allocated to 29 companies. Three petroleum/geothermal bids were successful: Torrens Energy, SAPEX Limited and Petratherm all received funding of $100 000.