PETROLEUM EXPLORATION

The Hon. B.V. FINNIGAN (15:15): My question is to the Minister for Mineral Resources Development. Will the minister provide information on how the government is stimulating further petroleum exploration investment in our state?

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (15:16): I thank the honourable member for his question. With the world oil price currently pushing to levels above $100 a barrel, the matter of oil and gas exploration supply is critical to South Australia's future economic development. South Australians recently experienced retail petrol prices of more than $1.50 per litre, putting an immense strain on the budgets of working families and the running costs of small and big businesses alike. Part of the answer to the increasing worldwide demand for energy that has contributed to the record worldwide oil price is to secure new sources of supply.

A new release of Otway Basin acreage was announced at the annual conference of APPEA (the Australian Petroleum Production and Exploration Association) recently held in Perth. Three blocks, OT2008 A, B and C, with potential for both oil and gas, are being offered to explorers on the basis of work program bidding. One of the blocks lies on an oil trend and another is adjacent to the gas producing field at Katnook.

The offer of acreage in the Otway Basin complements onshore exploration in the Cooper and Officer Basins in South Australia. While the Officer Basin, which is the area roughly west of Coober Pedy, is recognised as Australia's onshore petroleum province with the greatest potential for major oil and gas resources, the Otway Basin is one of the best known and actively explored basins spanning the southern coastline of Australia. Indeed Primary Industries and Resources SA geoscientists regard this area as the second most prospective basin in South Australia after the Cooper Basin.

As some potential exists for larger hydrocarbon accumulations, a reinterpretation of well and seismic data by PIRSA has shown that the structural evolution of the Otway Basin is analogous to basins elsewhere in the world found to contain at least one giant oil field. Bids close on 27 November 2008, and the seven-month bidding period has been designed to enable thorough industry evaluations and promotion of this investment opportunity by PIRSA geoscientists at a number of important national and international industry events.

Gas and oil discoveries in South Australia during the past 20 years, coupled with successful exploration in the Victorian sector of the onshore Otway Basin, continues to provide cause for optimism about the resource potential of this area. Although there have been several oil field discoveries in the onshore Otway Basin, the majority of discoveries have been gas. The current production is restricted to the Katnook gas field, which is relatively mature and produces gas and condensate, so new oil discoveries in the area will have the potential to attract renewed interest in oil exploration opportunities.

South Australia's petroleum industry continues to excite, and this latest acreage release is a further very important forward step in developing its full potential. At this time of high world oil prices it is hoped that this release will attract multiple bids from national and possibly international explorers seeking prospective acreage.