Chapter 2: History of petroleum exploration and development - PIRSA

Petroleum geology of South Australia. Vol. 4: Cooper Basin.We had looked very closely at the logs and the results ofGidgealpa 1, which had incidentally encountered abeautiful permeable section in the Permian. That Permiansection had been washed out so badly by sloppy drillingthat it was impossible to test most of it because youcouldn’t find an open hole test tool for it. It was equallyimpossible to set casing in cement because there wasn’t aperforating tool which would be able to perforate that thickcement jacket. Now knowing that, we suspected, again onthe logs, that some of the sands could be prospective. Weknew from the seismic the sands would thin across theGidgealpa structure but there was still good evidence that athin Permian sand cover would extend right across theanticline.We therefore suggested that they should drill a second holeor, knowing damn well that there wasn’t a tool in Australiawhich could do the job, test the Permian section inGidgealpa 1 to the Minister’s satisfaction. This we wereable to do under the Petroleum Act and we demanded thatthe companies fulfil the wish of the Government to test thePermian section in Gidgealpa 1 or alternatively drill asecond well on structure or near the structure culmination.Of course this started a really extensive controversybetween geophysicists, between geologists and betweenthe various companies. Santos and Total didn’t want tohave a bar of a second well. They didn’t want to test either,because they knew they couldn’t. Delhi was divided: theChief Geophysicist of Delhi, Frank Hinson, resigned fromDelhi because he was of the opinion that the structurewould be bald-headed. This was at a party given to thehonour of Norm Miller and some other high ranking peoplefrom Delhi’s US organisation, who again had came out tosettle some of the argument. It was at that party given byRalph Freeman (a Senior Geologist with Delhi) that Frankput down the law and told the Chief Geologist of Delhi inno uncertain terms what he could do with his job. It wasgreat fun.Finally it came to a meeting at the Department: theparticipants were Tom Barnes, Lee Parkin, John Klug fromSantos, who was then Operational Manager, Reg Sprigg,also acting on behalf of Santos, Jeff Greer from Delhi,Claude de Lapparent from Total and me. The Departmentmade it quite clear that we would not budge from ourposition: either one of the works would have to be carriedout. So they left. Delhi was inclined towards the secondwell. Then the whole thing actually went back to theMinister. It went to Tom Playford and it took TomPlayford’s well-known gentle persuasion and arm twistingwith some of the Directors of Santos that Santos wouldfinally agree that the second well would be drilled. Thatsecond well was Gidgealpa 2.Gidgealpa 2 capped by a ‘Christmas tree’ and ready for gasproduction. (Photo N013046)received more than £1.5 million in drilling and geophysicalsubsidies, which placed the partners fourth on the list ofsubsidy recipients from 1958–59 to 1963–64 (AustralasianOil and Gas Journal, 1965). Over time there were numerousrevisions and refinements to the scheme. Some such as theamendments in 1964 adversely affected exploration in theCooper Basin: they removed the subsidy for boreholesurveys and detailed structure drilling, reduced the subsidyrate for test drilling and stratigraphic drilling, and introducedexclusion circles. The latter, ‘one of the more controversialmodifications to the Acts’, were ‘defined areas arounddiscovery wells and fields which were excluded fromsubsidy’ (Passmore, 1994). The 64 km circle imposedaround Gidgealpa and Moomba included the mostsignificant discoveries in the basin to then. The originaldrilling at Gidgealpa had been subsidised under the scheme.Assessing the potential of the Gidgealpa Field andfurther exploration in the region occupied much of 1964.Four wells were drilled on the Merrimelia structure in 1964and 1965 and the first recorded sign of oil, apart from dullyellow fluorescence, in Triassic sediments was made inHeli Wopfner relating the flavour of the times (O’Neil, 1989a).Wopfner’s diaries, PIRSA (1963) and O’Neil (1989c, 1990)support Wopfner’s account that the department’s insistence onGidgealpa 2 being drilled led to the gas discovery.that the Petroleum Search Subsidy Act was one of the majorfactors which led to success in the search for petroleum, bothoil and gas, in this country. It was one of the features whichencouraged overseas capital into the search in Australia’(Rudd, 1966). Having induced overseas companies toAustralia, the industry came to rely on them for growth andsupport, especially as many of the local companies did nothave sufficient capital to qualify for subsidy payments or tosustain proper programs. Delhi–Santos, for example,Unable to conceal his delight at the optimistic developments atGidgealpa, Premier Playford displays a beer bottle containing thefirst distillate from Gidgealpa 2 while the General Manager ofSantos, John Klug, looks on approvingly at Adelaide Airport, 16February 1964. (Courtesy of the Advertiser; photo 42772)23