[Editor's note: This story was updated Oct. 11.]

Add Karoon Gas Australia to list of companies with an appetite for the Great Australian Bight.

The company is joining Bight Petroleum, Chevron Corp. (NYSE: CVX), Murphy Oil, Santos and Statoil ASA (NYSE: STO) in the search for hydrocarbons in what is considered one of the last underexplored basins in the world. Karoon said Oct. 7 it was awarded a permit spanning 17,793 square kilometers (sq km) by Australian regulators.

Citing strategy and the project’s competitiveness relative to others, BP Plc (NYSE: BP) has backed away from its Bight exploration drilling plans.

Karoon, which also has assets offshore Brazil and Peru, has set its sights on the Ceduna sub-basin—described as a massive Cretaceous delta system where only four wells have been drilled.

The exploration permit was awarded for acreage next door to Chevron’s Bight Basin assets amid rising commodity prices that have boosted E&P companies confidence.

Further price gains could usher in more exploration spending, possibly leading to more discoveries to feed the world’s growing energy needs.

Frontier ventures are still considered a gamble—one that some are willing to take.

“The geology, potential target size and surrounding significant near-term exploration activity make it a very exciting, high-impact opportunity,” Karoon said.

Estimates provided by the company showed that the industry has already committed to spending A$1 billion (US$760 million) during the next 24 months. The work will include nine exploration wells around neighboring permits, including BP’s Stromlo-1 and Whinham-1. Karoon’s initial three-year plan does not include drilling a well, but the company expects others’ work programs will de-risk its permit.

Like its peers, Karoon is banking on seismic data to help in the hunt for hydrocarbon resources, mainly in the deeper part of the basin.

Chevron, with a permit to explore about 32,000 sq km, participated in a two-stage multiclient seismic survey in which more than 22,000 sq km of 3-D seismic was acquired. Karoon plans to acquire a 2-D and a targeted 3-D seismic survey over its permit area as well as conduct geotechnical studies.

“There is a thick sedimentary succession with multiple structural and stratigraphic stacked play types,” Karoon said in a statement. “The sediments thicken in the central to outer areas of the sub‐basin, which remain largely untested.”

Historical studies, surveys and exploration drilling support the presence of a working petroleum system, Karoon said. Natural oil and gas seeps from the Turonian source rocks recovered from the seafloor and seismic data indicate likely tilted fault blocks and anticlines.

Information provided by Karoon also showed that the 1993 BHP-drilled Greenly-1 welleast of Karoon’s permit area, hit “good quality sandstones” with “significant shows.”

Another exploration well, drilled by Woodside about 10 years later west of Karoon’s permit area, failed to find significant amounts of hydrocarbons.

The pace of oil and gas companies’ exploration plans will likely depend on the pace of the sector’s recovery. However, commodity prices and risks that typically accompany frontier drilling are not the only concerns.

The Great Australian Bight is known for its marine life, including sea lions and endangered southern right whales. The Guardian reported Oct. 7 that environmentalists are calling for a moratorium on new licenses in the basin.

Acknowledging the area is a “pristine wilderness,” Karoon said it takes its “environmental responsibilities very seriously and has a history of upholding high standards with respect to meeting its regulatory and social obligations.” It plans to monitor current drilling programs and assess environmental risks.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in Australia was in the process of reviewing BP’s plans to drill the first two wells in its Bight drilling program when the company announced Oct. 11 that it decided not to proceed with the exploration project.

Activity logged on the agency’s website show it had requested more information after being unable to make a decision for a second time. BP said its decision was neither the result of altered views of the region’s prospectivity nor the ongoing regulatory process of the NOPSEMA.

“We have looked long and hard at our exploration plans for the Great Australian Bight but, in the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals,” Claire Fitzpatrick, BP’s managing director for exploration and production, Australia, said in a statement. “After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight.”

BP, which was partnering with Statoil, had planned use the Ocean GreatWhite to drill the Stromlo-1 and Whinham-1 wells. The program was scheduled to begin in fourth-quarter 2016.

RELATED: BP Touts Great Australian Bight Opportunities

Velda Addison can be reached at vaddison@hartenergy.com.

Offshore