PERTH, Feb 25 (Reuters) - The U.S.-based Chevron Corp became the latest in a string of oil majors that have decided to invest in Australian shale, announcing on Monday that it has bought interest in two gas blocks in the Cooper Basin from Beach Energy.
Chevron said it will initially acquire a 30 percent working interest in block PEL 218 in South Australia, and 18 percent working interest in block ATP 855 in Queensland. The deal gives Chevron the option of later increasing its interest in PEL 218 to 60 percent and the interest in ATP 855 to 36 percent.
Beach Energy will receive up to $349 million over two stages spanning several years for interest in the two gas blocks, Beach Energy said in a statement.
“The Cooper Basin is an established petroleum producing basin and provides the opportunity to leverage our expertise in tight gas,” Roy Krzywosinski, Chevron Australia managing director, said, adding that it could also add to the company’s natural gas portfolio.
The Cooper Basin is considered to be one of Australia’s best prospects for commercially producing shale gas given its proximity to the country’s eastern population centres and export infrastructure at the port of Gladstone.
Santos became the first to commercially produce shale gas from the Cooper Basin late last year from its Moomba-191 well, in which Beach Energy holds an interest.
Chevron is currently building two of Australia’s largest liquefied natural gas (LNG) plants, Gorgon and Wheatstone, with a combined capacity of nearly 25 million tonnes per annum, in Western Australia.
Chevron is already a large player in natural gas on Australia’s west coast. It is new both to unconventional gas development in Australia as well as to the country’s east coast natural gas industry.
With the new acquisition, Chevron may also be looking to partner with other gas developers on the east coast, including those developing LNG plants at Queensland state’s Gladstone port, Goldman Sachs analysts said in a note to clients Monday.