MELBOURNE, AUSTRALIA—The underexplored Great Australian Bight off the coast of South Australia remains high on BP’s agenda with the supermajor taking the chance to talk up the opportunities of the frontier basin at the Australian Petroleum Production & Exploration Association (APPEA) conference and exhibition.

Speaking at the exploration-focused plenary session on the second day of the event, BP Asia Pacific vice president for exploration Bryan Ritchie said the prospects for explorers were still bright with both demand for oil and gas expected to grow over the next two decades.

Oil is forecast to remain the dominant fuel for transport while gas will be the fastest growing fossil fuel as well as the cleanest.

“I think as explorers we can take comfort that there will be demand for our future exploration successes,” Ritchie said.

Ritchie said reserve growth had remained solid.

“Proved oil and gas reserves are up 27% and 19% respectively over the last ten years despite production of 11% and 29% over that period,” he said.

“Despite growing demand and consumption of resources, the oil and gas industry that we are in has more than replaced reserves enabled by the opening up of new frontiers and technology as well as, until recently, high oil prices.”

Ritchie pointed out the global exploration prize was still a big one, with 1 trillion barrels of oil equivalent (Tboe) for conventional hydrocarbons yet to be found. The industry had to date discovered about 4.5Tboe of conventional resources.

Ritchie said the 90s, characterized by a wave of industry consolidation, was the golden age for exploration when the majors found about 30% of discovered resources.

For BP, Ritchie told delegates the company was continually working to identify new exploration frontiers and opportunities worldwide to build on the seven discoveries made in 2013 and five discoveries in 2014.

Ritchie said BP’s key play tests over coming years would be in Nova Scotia, the Brazil equatorial margin and the Great Australian Bight.

“The Great Australian Bight is an example of BP testing a new frontier basin,” he said.

The company was awarded four blocks in the basin back in 2011 covering about 24,500 sq km.

“This large position covers a significant portion of the underexplored Ceduna sub-basin,” he said.

Ritchie remained realistic about the gamble involved with high-risk exploration, noting than one in ten frontier exploration wells were successful.

However, he remains bullish on the Great Australian Bight.

“It does appear that we have all the fundamentals here for a new petroleum province to be opened up off the coast of South Australia,” he said.

“We are looking forward to testing this frontier opportunity with our first exploration well due to spud in 2016.”

Ritchie later revealed to media at APPEA that the US$755 million drill rig being built by Diamond Offshore Drilling Hyundai Heavy Industries in Korea, which will be deployed to drill the Great Australian Bight wells, was 80% complete.

Ritchie said the first well in the program would be drilled about 200 km off the South Australian coast, with all wells targeting oil.

BP has a 70% working interest in the Bight program, with Statoil holding the reaming interest. However Ritchie said the company would look to reduce its holding in the venture in line with its de-risking strategy. The company would likely begin a farm-out process in the second half of this year.

Ritchie said BP would be content with a 40% to 50% holding in the Bight joint venture.

Lauren Barrett, associate editor for Hart Energy's Oil and Gas Investor Australia, can be reached at lbarrett@hartenergy.com.

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