Chapter 2: History of petroleum exploration and development - PIRSA

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Petroleum geology of South Australia. Vol. 4: Cooper Basin.The arrangement when Delhi joined the search in May1958 was for it to be the operator of the geophysical andgeological work, to drill two deep wells (one each in SouthAustralia and Queensland) and to acquire a 50% interest in ageological, seismic and drilling program (spending at least£2 million over the ensuing four years) in the licence area.The company formed Delhi Australia Petroleum and openedan office in Adelaide. Its combination with Santos becameknown as Delhi–Santos. The partnership also looked forextra financial assistance: Frome-Broken Hill’s earlier lackof success in South Australia had not deterred its hopes andthe company joined Delhi–Santos as an equal partner inMarch 1959. This method of a licensee farming-out areas toothers prepared to farmin to a joint arrangement waslegislated for in 1958. Amendments to the Petroleum Act,which were to favour Santos and Delhi, also allowed thecreation of a chequerboard system through which licenceareas could be subdivided so that other companies couldparticipate. The time for working the new blocks wasextended from one to five years. Frome-Broken Hill’sfarmin agreement was a temporary one under which it was topay for the drilling of three wells in South Australia andQueensland to earn a one-third interest in OELs 6 and 7.The Mines Department undertook seismic investigationsin largely unknown sand covered areas near Innamincka,which had become a ghost town by 1954 because of adecline in the pastoral industry, and into South-WestQueensland from August 1958 to May 1959 for Delhi.Playford had acceded to Delhi’s request to improve andexpand the seismic operation prior to this survey. Thedepartmental seismic crew was contracted by Delhi to shoottraverses across and along the Innamincka Dome and aregional traverse from Innamincka via Cordillo to Betoota.The department supplied the technical staff under theleadership of K.R. Seedsman and B.E. Milton, seismicequipment, caravans and two drills while Geosurveysprovided non-technical services, carrying facilitiesincluding double-decker buses, a drill and other equipmentto fulfil the logistical requirements of the survey. Using theadvice of Geosurveys, Santos selected a drill site 35 kmnortheast of Innamincka. The Strzelecki Track, a formerstock route which had petered out after the 1930s depressionbecause of a lack of water bores, was then built by thegovernment over the 460 km from Lyndhurst to Innaminckato allow the area to be serviced by vehicles involved in thepetroleum search (Donovan and Donovan, 1996).The Premier and the Minister attended the peggingceremony at Innamincka in February 1959 and drillingcommenced at the end of March. Innamincka 1, the firstwell to drill through the Cooper Basin and to penetrate thefull Eromanga Basin sequence, was completed to 3852 m byNovember. It reached gently dipping Ordovician beds(which were assigned questionably to the Devonian at thetime and for the next 30 years) and revealed thin Permiansediments beneath a thick Triassic sequence. Oil and gasprospectivity was suggested by minor hydrocarbon shows insediments within the Mesozoic succession. Thirty-fivecores were taken during the drilling and ten drillstem testswere run. These provided evidence of gas with water andoil-cut mud in the Permian and Mesozoic which encouragedfurther exploration.The Delhi–Santos search also included areas inSouth-West Queensland where Santos held ~175 084 km 2under Authorities to Prospect 66P and 67P around HaddonCorner. In 1958 the companies proposed that the SouthAustralian and Queensland governments consider the areasin the two States as one exploration prospect: the whole areaunder consideration was larger than the State of Texas(Australasian Oil and Gas Journal, 1958). OELs 6 and 7 inSouth Australia expired in February 1959 and were reissuedas OELs 20 and 21 (~457 520 km 2 ). Delhi–Santos’s interestin the Cordillo Downs area had led to access roads beingbuilt together with an airstrip at Haddon Downs for largeraircraft. In the event, the companies could not achieve theirGeosurveys adapted double-decker buses as mobile camps for itsfield survey parties: this bright yellow one was the kitchen at theInnamincka camp in 1958. (Photo T001671)Drilling Innamincka 1. (Photo T001689)20
Petroleum geology of South Australia. Vol. 4: Cooper Basin.The drilling crew was running joints of pipe into the hole inrapid succession as they prepared to conduct a drill-stemtest on the Innamincka No. 1 exploratory well in SouthAustralia. Engrossed in their work, they paid scantattention to a man sitting on an apple box next to the drilleron the derrick floor.But the man’s eyes were glued on the crew as they loweredmore and more lengths of pipe into the hole. Suddenly, amessenger ran up and said: ‘It’s dinnertime, Sir Thomas.’Thus Sir Thomas Playford, Premier of South Australia,arose from his apple box and journeyed to the camp for hisevening meal. But as soon as he finished eating he wastedno time getting back to his favourite perch.‘It’s quite a bit different from putting down a percussiondrilled water well on my fruit orchard,’ he observed.The Premier’s vigil on the apple box at Innaminckasymbolized the interest of people all over Australia inDelhi’s exploratory drilling program in the vast, primitive,outback region. The Great Artesian Basin lies underneaththis area of Central Australia.Sir Thomas Playford’s personal interest in the oil search impressedDelhi as the company’s magazine indicated admiringly(Delhi-Taylor Oil Corporation, 1960, p.8).aim to work their holdings as a whole: the exploration anddevelopment programs were operated and reported to therespective governments independently. But in 1960 theSouth Australian Mines Department participated in drillingBetoota 1 in Queensland. That well went through the samesequence as at Innamincka but on the flank of a structure andit ran into a conglomerate so the well was stopped.Frome-Broken Hill withdrew from its farmout agreementwith Delhi–Santos after Betoota 1.THE BREAKTHROUGHDiscoveries of oil and gas in the first half of the 1960s inQueensland, the Northern Territory, Western Australia andoffshore Victoria continued to encourage speculators,investors and companies. The general mineral boom of thatdecade brought many large and small overseas andAustralian companies onto the petroleum scene. Forexample, Sprigg with others formed and promoted BeachPetroleum in 1960 and later held licences in the NorthernTerritory and elsewhere. In 1962 H. Harvey (a Santosdirector since 1957) arranged for Total Exploration, asubsidiary of the French Petroleum Co. (Australia), to inject£800 000 into Delhi–Santos by purchasing one millionshares. More foreign and interstate capital came to the foreafter a gas discovery was made in 1963: Burmah Oil, forexample, joined in the search in 1965. The StateGovernment readily accepted that foreign capital andimported technology and expertise were necessary in thesearch and development phases.From 1960 the aeromagnetic and gravity surveys becamebetter organised and more systematic. New seismictechniques and technologies and exploration strategies in theindustry led the Mines Department to expand its operationsto focus on ‘soft rocks’ for petroleum. Its geophysicistsworked in the vicinity of Birdsville from July to November1960 and work was carried out at Durham Downs andInnamincka Dome for Delhi between August andWe got to the point below the water-bearing sandstonewhere we hit a lot of hard red rock ... an ominous sign. TheDirector was coming into my room the moment any corearrived and chewing his fingernails. Playford waspersonally very interested in what went on. When they hitthe red rock they thought they had hit bedrock. I didn’tknow either because I didn’t know what went on below theJurassic sandstone. I wrote to a friend [Dorothy Hill of theDepartment of Geology at the University of Queensland]and said, ‘Could you send me some samples down urgentlyof what you are drilling through in Queensland in thesequence?’ She sent me down a selection of relevantspecimens and that was all I had to go by, what they weredrilling through below the aquifer sandstone. I looked atthe samples and thought, ‘This is not bedrock.’ I didn’tknow quite what it was. The Director was in my room atthe time and he was very distressed to know whether wewere in bedrock and I said, ‘Hold your horses, we are not inbedrock yet’, so he went off. And then we ran into coal farbelow that, which made it even funnier. That coal wasprobably Permian, so we were well above bedrock.Finally we went through the coal, unknown sections, andwe went into some other very hard rock. Red. Red isusually the bad sign, because it is not very marine. Isuddenly recalled that I had seen some red sandstones verysimilar to this in samples of Devonian from western NewSouth Wales. I thought, ‘Someone has got to saysomething or someone around the place will have a stroke,so I will make a stab at it.’ So I said to the Chief Geologist[Tim O’Driscoll], ‘I think we are in the Devonian because Ihave just been picking through the cuttings and I think Isaw some shelly bits that remind me of some bits I saw inthe Devonian rocks from western New South Wales.’ Sothey remained in that rock, nobody had a stroke, andeventually they just drilled on and on; it was still in thesame formation so they eventually decided to stop thebore ...They accepted the fact that it was Devonian ... Afterwards Imodified it a bit to say it could be Cambrian because wehave got some Cambrian red beds out on the eastern side ofthe Flinders Ranges. It could be those but that is the onlyalternative. But it is not Precambrian and it is not all thatold, just hard.The experienced departmental palaeontologist, Dr Nell Ludbrook,describing the excitement associated with drilling the wildcatInnamincka 1 well (O’Neil, 1989b). Zang (1992) and Cooper(1986) have shown this to be Ordovician.November. A field party continued seismic shooting fromBirdsville to Marree at the end of May 1961. The search wasencouraged by the news in December 1961 of the discoveryand potential of the Moonie oil field in Queensland, whereAustralia’s first production of oil in commercial quantitiesbegan in 1964 (Wilkinson, 1988).The results of the department’s seismic surveys in thenortheast between 1960 and 1964 helped to define structuraltrends in the Cooper Basin and were particularly importantin identifying the Gidgealpa–Merrimelia–Innamincka(GMI) Ridge, with the consequential discovery of naturalgas. But ultimately the situation developed to the stagewhere the department could not justify undertaking workwhich contract seismic crews should have been doing at thatstage of exploration. As the expense of continuallymodernising the department’s equipment was not justified,after 1964–65 its operations were scaled down and the21
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Chapter 2: History of petroleum exploration and development - PIRSA

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