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South Australia has a long history of petroleum exploration, extending back to 1866, when the first well was sunk adjacent to the Otway Basin in the search for oil. In the 1950s the early Palaeozoic sediments in the state’s NE were the focus of effort until gas was discovered in the overlying Permo-Carboniferous section in the early 1960s (Cooper Basin). The Cooper and Eromanga Basins, which span northeastern South Australia and South West Queensland, are now Australia’s largest onshore petroleum province. Over the last 50 years, exploration and development activity in South Australia has focused largely on this mature basin.

Gas and liquid pipelines throughout Australia are shown in Figure 1. Cooper Basin gas supplies domestic markets in South Australia, New South Wales, Queensland and Victoria via an extensive pipeline network; as well as to export markets via the Santos GLNG plant at Gladstone since October 2015. Santos GLNG is led by Santos, in partnership with PETRONAS, Total and KOGAS.

The Cooper Basin Liquids Project (1980–84) was initiated to market the oil and existing gas liquids. A liquids pipeline links Moomba to a processing plant and storage and export loading facilities at Port Bonython. See Oil and Gas Fields (PDF)

The other basin in South Australia currently producing commercial hydrocarbons is the onshore Otway Basin, where gas was discovered in 1987. The Otway Basin remains a proven gas province, with potential on- and offshore oil plays in South Australia and Victoria, and in offshore Tasmanian waters.

Bona fide oil and gas shows have been recorded in the state’s early Palaeozoic basins, however, these frontier basins remain underexplored by world standards.

Exploration is underway to determine the potential of the State’s  unconventional reservoirs and includes deep coal seam gas, , tight gas, shale gas, basin-centred gas and hydrocarbons from coal, , in situ gasification and Syngas processes.  Exploration for these new resources is at an early stage in the State, however significant potential exists and research by explorers and DPC to understand and evaluate new plays is progressing.

In a mature basin such as the Cooper, major effort has been focussed on these new plays by Beach Energy, Santos Ltd and Senex. Beach have drilled vertical and horizontal wells and conducted hydraulic fraccing to test the REM shale gas and basin centred gas play in PEL 218 over the last four years. Santos have drilled and fracced vertical and horizontal wells, and has announced sustained  flows from deep coal seams, fractured shale and continues to produce tight gas. Senex Energy has published resource estimates for a shale gas play in the Allunga Trough and Mettika Embayment, AGL tested the Winton CSG play in 2009 and Strike is Permian coals for deep CSG in the southern Cooper Basin.

Linc Energy has been exploring in situ gasification of coal in the Walloway Basin, and for an unconventional shale oil play and CSG in the Arckaringa Basin.

The petroleum exploration expenditure for the 2014/15 financial year was $400.1m for South Australia down from $531.3 in 2013/14.

Cooper and Eromanga Basins

Exploration and development in the South Australian part of the Cooper Basin have taken place in a number of phases, driven by market demand for gas as well as the oil price. The first followed the discovery of gas at Gidgealpa in 1963. By 1969 gas from the Cooper Basin was piped 790 km to Adelaide.. This was followed by the $1.4 billion ‘liquids scheme’ in the early 1980s following Eromanga Basin oil discoveries and their combined development with that of liquids from the wetter gasfields. From 1982–91 gas exploration accelerated to ensure supplies for South Australia into the 21st century.

Competitive acreage releases have been used successfully by the Department to manage highly prospective Cooper Basin acreage since 1998. The expiry of long term exploration licenses (PELs 5 and 6) enabled the most significant structured release of onshore Australian acreage in the industry’s history, and has generated:

  • 38 PELs and 4 PELAs from 80,582 sqkm acreage,
  • $581.9m in guaranteed work program bids (2015 dollar value),
  • 253 conventional exploration wells, 41% of which achieved commercial success
  • 104 new field discoveries,
  • $348.1m royalties and $4.5b sales, and
  • increased gas supply-side competition

Cooper acreage turnover has also changed the make up of Australia’s onshore exploration industry through a number of ‘company-making’ discoveries.  Twelve acreage releases have been staged since 1998, enabled by the Petroleum Act 2000 then the Petroleum and Geothermal Energy Act 2000, conjunctive agreements with Native Title claimants, access to multiple-use Innamincka and Strzelecki Regional Reserves and transparent application and bid assessment processes.

In 2002 new Cooper Basin explorers began exploring their licences. Exploration levels continued to increase in the region as new licences were granted following successful conclusion of right to negotiate (RTN) access agreements with Native Title Claimants.

In anticipation of the 2009 Cooper Basin acreage release, negotiations opened in 2006 to develop a conjunctive Indigenous land use agreement (ILUA) for the South Australian Cooper Basin region already covered with land access agreements resulting from earlier RTN proceedings. In February 2007, the Yandruwandha/Yawarrawarrka peoples entered into the first petroleum ILUA in the South Australian Cooper Basin, covering ~40 000 km2 of the basin area. This agreement also represents the first conjunctive petroleum ILUA in a productive basin in Australia. This was followed in June 2011 by the second conjunctive petroleum ILUA negotiated with the Wangkangurru/Yarluyandi people over lands situated in the north western Cooper Basin. Negotiations are progressing with the Dieri people who hold a native title determination over the central Cooper Basin region.

Unconventional gas plays are stimulating a new phase of exploration in the Cooper Basin. Oil exploration is continuing on the western margin of the Cooper Basin where Senex and Beach are back exploring this play trend after widespread flooding in 2010-11. Exploration and development of the western flank oil play is continuing, and will accelerate as a result of the Subject Area Agreements already in place with Senex Energy, Beach Energy, Santos, Drillsearch. Cooper Energy and Origin Energy.

The phase of Cooper Basin acreage turnover served both the state and industry well, however from the late 2000s, blocks were shrinking in size and becoming harder to explore. While acreage turnover achieved good outcomes,  DPC recognised change was needed, stemming from recommendations of the Roundtable for Oil and Gas in SA in 2012.  A new approach to provide more certainty for licensees through longer tenure Petroleum Retention Licenses provided a solution. Exploration investment has been accelerated and the drift towards ever-smaller exploration licenses has halted.  Currently some 13,000 sqkm  of PEL have been converted to PRL from these acreage releases.

Otway Basin

The first economic gas discovery in SA and the Otway Basin was the Caroline CO2 field in 1967. The discovery of natural gas at Katnook in 1987 spurred on exploration and five gas fields were discovered. Otway Basin gas supplied local markets in the South East since 1991, however since 2013 the Katnook Plant and gathering flowline network have been mothballed with nitrogen as existing producing fields have been depleted and exploration continues. . Economic oil discoveries remain elusive, although 21 wells have oil shows. Exploration around the Jacaranda Ridge 1 oil discovery commenced in mid-2007 with a condensate discovery at Jacaranda Ridge 2.

The SEA Gas Pipeline transports gas from the Otway Basin (Victoria) to markets in Victorian and South Australia. Commissioned early in 2004, this pipeline doubled gas supply capacity into South Australian gas markets, creating more competition amongst gas wholesalers, and providing greater security of supply for South Australia.

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Geothermal energy

The South Australian Government is leading Australia with expeditious and effective processing of activity approvals for geothermal energy.  In August 2004, a change in policy enabled over-the-counter applications for geothermal exploration licences (GELs) to be accepted on lands anywhere in the entire state, except over current GELs or lands excluded from exploration (e.g. certain parks). This triggered enormous growth in the number of GELs and applications (GELAs) in South Australia from 3 in August 2004 to 31 at October 2015.

For more information, contact:

Elinor Alexander
Director Geoscience and Exploration
Energy Resources Division

+61 8 8463 3211
elinor.alexander@sa.gov.au