House of Assembly Fifty-Third Parliament, First Session (53-1) 53 1 Parliament of South Australia House of Assembly published Question Time Oil and Gas Sector Oil and Gas Sector Mr VAN HOLST PELLEKAAN House of Assembly Stuart Oil and Gas Sector Mr VAN HOLST PELLEKAAN (Stuart) (14:23): Given that in the minister's answer he referred to Ambassador's work plan, which I understand included $33.5 million of expenditure and that they would drill eight exploration wells, can the minister advise the house whether any of that work has been done? The Hon. A. KOUTSANTONIS House of Assembly West Torrens Minister for Finance Minister for State Development Minister for Mineral Resources and Energy Minister for Small Business Oil and Gas Sector The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (14:23): What the shadow minister is getting to is the suspension. Suspensions can be enacted for a number of practical and non-disciplinary reasons, which I am sure he knows but is probably not going to tell us in the house. For example, where flooding impairs land access—flooding happens in Cooper Basin quite regularly—where reasonable availability of seismic crews is not available or drilling rigs are an issue, where there are significant costs, benefits can— Mr van Holst Pellekaan House of Assembly Mr van Holst Pellekaan: Have they done anything? The Speaker House of Assembly The SPEAKER: The member for Stuart is called to order. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: Yes, they did. I have to say that yelling out, 'Have they done anything?' is a really appalling way to treat the oil and gas sector by the shadow minister, who should be their champion rather than someone attacking them. Mr Wingard interjecting: The Speaker House of Assembly The SPEAKER: The member for Mitchell is called to order. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: For example, where flooding impairs land access, and of course I have spoken about that—and the Cooper Basin was extensively affected by unprecedented La Niña rainfall in 2009-11—flooding prevented access to major parts of the basin, I am advised, and stopped companies conducting on-ground regulated activities such as seismic and drilling. The department proactively offered all affected licences a rolling six-month suspension until it was possible to enter the land to conduct operations safely without impacting on the environment—again, facts that you just won't talk about. A number of affected licences— The Speaker House of Assembly The SPEAKER: The minister is warned a second and final time for not addressing his remarks through the Chair. The Hon. A. KOUTSANTONIS House of Assembly The Hon. A. KOUTSANTONIS: I apologise, sir. A number of affected licences, including those operated by Senex, Beach and Santos, as well as Ambassador, were put into suspension to manage flood impacts on work program timing. Delays caused by flooding led to major logistical issues securing crews to conduct programmed seismic surveys in this licence and other licences. In August 2013, Ambassador succeeded in obtaining extensive US shale development experience by attracting Outback Energy Hunter to take up 70 per cent interest in their petroleum exploration licence No. 570, the one that the shadow minister, Mr Speaker, was so interested in. Outback Energy Hunter agreed to pay all costs, including funding Ambassador's remaining 30 per cent share, associated with the exploration work program to satisfy the first five-year term of the PEL (petroleum exploration licence) up to a maximum of $50 million. This strategic farm-in led to Outback Energy Hunter taking a 52 per cent interest in PEL 570 in February of this year, a good outcome for the state. Outback Energy Hunter's parent company, New Standard Energy, purchased producing and prospective acreage in both Eagle Ford Shale in onshore Texas from Magnum Hunter Resources (another very important company to have here in South Australia) and 52 per cent of PEL 570 in the state's Far North funding, the first $42.5 million of the primary work program. In terms of the current state of play of PEL 570, based on market announcements, New Standard Energy acquired Outback Energy Hunter's stake in PEL 570, as announced on 10 December 2013—again, Mr Speaker, facts the opposition will not talk about. On 29 October 2014, Ambassador was delisted following compulsory acquisition by Drillsearch. On 29 October, New Standard announced that it completed its farm-out of 35 per cent of petroleum exploration licence 570 to Santos. In return, Santos will meet 75 per cent of New Standard's expenditure commitment associated with New Standard's $42.5 million farm-in obligations to Drillsearch (formerly Ambassador Energy), of which $300,000 was already spent. The Speaker House of Assembly The SPEAKER: The minister's time has expired.