Bass Strait: long history, bright future

Drilling Engineer Tim Woods, onboard the Snapper platform.

Since 1969, ExxonMobil’s offshore Australia operations have produced more than 60 percent of that nation’s oil and 30 percent of its natural gas. And there’s more on the way.

This year marks the 40th anniversary of ExxonMobil’s offshore oil and gas production in Australia’s Bass Strait. During those years, nearly 4 billion barrels of oil and 7 trillion cubic feet of natural gas have been produced, transported ashore, processed and delivered to customers throughout much of the continent.

According to a study by the research firm Econtech, in producing nearly two-thirds of Australia’s cumulative oil production and approximately one-third of its natural gas production, these operations have created some 50,000 jobs, contributed about $1.7 billion a year to the country’s gross domestic product and generated $235 billion in federal government revenues (in 2006 dollars).

“We’re proud of our longterm contribution to the nation’s energy supply,” says John Dashwood, ExxonMobil’s lead country manager in Australia. “And because sea conditions in Bass Strait are so challenging, we’re especially proud that we’ve operated there in a safe and environmentally sound manner for all these years.”

Bass Strait is a 150-mile-wide channel at the southeast corner of Australia. The strait separates the state of Victoria and the island state of Tasmania, and is renowned among mariners for strong currents, roaring winds and raging seas. Shipwrecks were a common occurrence during the 18th and early 19th centuries.

In 1964, Esso Exploration Australia Inc. and Australia’s Broken Hill Proprietary Company Limited (today BHP Billiton) formed a 50-50 joint venture, with ExxonMobil as operator, to explore for oil and gas in Bass Strait. The first wildcat well was spudded late that year in the Gippsland Basin, and weeks later the partners announced the discovery of natural gas. Additional discoveries of gas, and then oil, soon followed, transforming Australia’s oil supply situation from one of almost complete dependence on imports to one of substantial self-sufficiency.

Technology drives success
Operating in Bass Strait’s rough seas has always presented challenges to ExxonMobil engineers. From the initial startup in 1969, the next 20 years involved rapidly ramping up production from world-class oil fields Halibut and Kingfish, and major gas fields Barracouta and Marlin. Then came development of smaller fields such as Cobia, Tuna and Flounder, followed by development of even smaller fields Bream, Perch and Dolphin.

Today, ExxonMobil’s Bass Strait operations comprise 362 operating wells and 21 platforms and offshore installations, producing about 120,000 barrels of liquids and more than 700 million cubic feet of natural gas a day.

“Bringing those smaller fields into production in a cost-effective manner was especially challenging,” notes Dashwood. “Our engineers took advantage of ExxonMobil technologies to design smaller platforms that could be built at relatively lower cost and still could safely withstand the harsh Bass Strait environment.” These technologies — which included remote-operated facilities, gravity-based platforms and subsea well completions — enabled the company to produce more oil and gas at lower cost.

“Our engineers worked with our counterparts in America to apply technologies that allow Bass Strait platforms to withstand 75-foot waves without damage, making them safer and able to continue operating in severe weather,” explains Geoff Humphreys, operations technical and surface manager. “Statistically, a 75-foot wave occurs here just once every 100 years.”

Global expertise is ExxonMobil strength
Humphreys notes that such a collaborative effort is commonplace within ExxonMobil. “Worldwide, we have about 14,000 engineers and scientists, and about 1,400 of them have doctoral degrees,” he says. “That’s a tremendous resource of expertise that all ExxonMobil affiliates can call upon.”

For example, as Bass Strait production matured, many wells began producing increasing volumes of water along with the oil. Company engineers met this challenge by developing “hydrocyclone technology” that removes residual oil from formation water after it comes out of the primary separators. Hydrocyclone technology — using high centrifugal forces in a vortex — is used today throughout the industry.

In addition, ExxonMobil drilling teams used collaborative expertise along with cutting-edge drilling and completion technology to achieve outstanding results in the Bass Strait.

In 1979 and 1980, the company drilled two world-record wells. The first took 170 days and reached a depth of 17,000 feet. The second spanned 138 days and reached 18,000 feet. A few years later, ExxonMobil drilled a 16,000-foot well in just 54 days.

In 2005, the Bass Strait drilling team was among the first to use ExxonMobil’s proprietary Fast Drill Process, which further lowered drilling time and costs. In 2008, the Australia team used ExxonMobil’s enhanced suite of proprietary technologies to drill the longest and most complex well in the history of the Bass Strait to a total depth of around 21,200 feet in less than 32 days.

“These same ExxonMobil technologies, applied by a talented team to Bass Strait drilling programs, continue to deliver industry-leading results as we relentlessly pursue safe and environmentally sound drilling operations,” says Harry Longwell III, ExxonMobil’s field drilling manager in Australia.

Longford is receiving point
Bass Strait production comes ashore via a network of 325 miles of underwater pipelines that lead to the Longford Plant in Gippsland, Victoria. The complex includes three natural gas processing plants and a crude oil stabilization plant. Longford has supplied most of Victoria’s natural gas since 1969. It also furnishes gas to the states of New South Wales, South Australia, Tasmania and the Australian Capital Territory.

From Longford, the oil and gas liquids move by two 135-mile pipelines to Long Island Point. There, the oil is distributed to refineries and the liquids are processed into liquefied petroleum gas and ethane for sale to customers.

More production on the way
Bass Strait production will increase substantially beginning in 2011 when the Kipper/ Tuna and Turrum projects, with a combined investment of more than $2 billion, come online. ExxonMobil is operator and holds a 32.5 percent interest in the Kipper resource and 50 percent interest each in the Tuna and Turrum prospects.

The combined Kipper/Tuna resource holds some 620 billion cubic feet of recoverable natural gas and 30 million barrels of gas liquids. It will be developed by installing subsea wells, and production will be piped to Longford. Fabrication began in 2008, and production is expected to begin in 2011.

The Turrum field holds about 1 trillion cubic feet of natural gas and 110 million barrels of oil and gas liquids. Development involves constructing a new platform that will be bridge-linked to an existing platform. The expanded structure will process additional oil and gas, which will be piped to the Longford Plant. Construction began this year, with production also scheduled to begin in 2011.

With the Kipper/Tuna and Turrum fields coming online in two years, the future remains bright for Bass Strait operations. These new projects combined will provide enough energy to power a city of a million people for at least 35 years. And the company’s ongoing exploration, drilling and evaluation programs continue to increase production from existing fields.

“So even after 40 years of production, Bass Strait still has a long life because we continue to invest in future energy supplies,” says John Dashwood. “ExxonMobil will be producing oil and gas for Australians for many more decades.”