Commercial Oil Production Gets Underway at Ungani Field in Western Australia

abarrelfullabarrelfull wrote on 24 Jul 2015 05:50
Tags: australia buru mitsubishi upstream


Mitsubishi Corporation (MC) and Buru Energy Limited (Buru Energy) have been working together to undertake exploration and development of onshore oil and gas in the Canning Super Basin, located in the Kimberley region of Western Australia (WA). The MC-Buru Energy joint venture is pleased to announce the commencement of commercial production of the Ungani oil field. This is the first commencement of commercial onshore oil production involving Japanese companies in WA.

The joint venture is aiming to accelerate development and increase production starting with an initial volume of 1,250 bbl/d to 3,000 bbl/d within 2015, and more than 5,000 bbl/d in the next few years. In parallel, the joint venture continues to explore prospects near the Ungani field as it aims to further expand its hydrocarbon reserves to more than 100 million bbl, assuming a best-case scenario.

Oil produced from the Ungani fields is of very high quality including its notably low sulfur content, and stable demand is expected in Asia and the Pacific. The joint venture is seeking to expand the sales activities to the oil refiners in mainly Southeast Asia through the MC Group oil trading company, Petro-Diamond Singapore Pte Ltd. Based on the current market environment, the joint venture will strive to achieve cost-competitive crude oil by reducing logistics and facilities costs and enhancing productivity.

The joint venture will also draw on earnings from the project for further oil exploration and to undertake the appraisal and development of unconventional gas resources in the Canning Super Basin, where there is higher potential for hydrocarbon reserves.

By realizing stable production and supply of Australian oil and gas, MC will continue seeking to contribute to diversify and secure competitive energy resources in the long term.

About unconventional gas and oil resources
Conventional resources are trapped in permeable reservoirs and can be extracted readily and easily once drilled, whereas unconventional resources are trapped in low-permeability sandstone (tight sand gas) or shale, a layer of solidified sediment referred to as source rock of shale gas and/or shale oil. Since these resources are found trapped in sediments of extremely low permeability, they are difficult to extract and have not been commercially developed until recently. Recent advances in technology have enabled the large scale development of unconventional resources as a viable energy source.

Potential for unconventional hydrocarbon reserves in Australia
New developments in the natural gas sector in North America, including the potential impact of unconventional natural gas resources such as shale gas or tight sand gas, have been gaining much attention in recent years. As a stable gas producing country and a main source of the LNG exported to Japan, Australia is also increasingly gaining attention for its potential, in terms of deposits, as a source unconventional oil and gas resources. According to data released by the US Energy Information Administration in June 2013, Australia ranks among the top 10 countries having technically recoverable shale gas resources of 437 trillion cubic feet, behind other countries often featured for their shale gas reserves such as the US with 665 trillion feet, Canada with 573 trillion feet and Mexico with 545 trillion feet. MC has secured an extensive area of about 900,000 square kilometers in the Canning Basin (235 trillion cubic feet) in the Kimberley region of Western Australia, an area considered to carry the most potential for natural gas exploration and extraction in Australia.


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