Beetaloo or bust: the route to commercial success for an Australian shale play
Anne Forbes A * , Angus Rodger B and John Gibb AA
B
Anne Forbes is a senior research analyst in Wood Mackenzie’s Australasia upstream research team. Since joining in early 2022, she has worked on oil and gas assets and the domestic market balance across Australia. Prior to Wood Mackenzie Anne spent 8 years at Chemostrat in a technical geological role in the upstream industry. She specialised in stratigraphic analysis and has worked across Australia’s principal producing basins. She has a Bachelors and Masters in Geology from the University of Cambridge, and a PhD in Volcanology from the Open University. |
Angus Rodger leads Wood Mackenzie’s benchmark analysis of global pre-FID delays and deep-water developments, including cost deflation and project evolution studies. Since joining Wood Mackenzie Angus has worked on a variety of upstream projects across Asia and Australasia. An expert in deep-water analysis, he has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. Angus previously worked in London covering the North Sea and West African upstream sectors. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
John Gibb is a research director in Wood Mackenzie’s upstream Australasia Oil & Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful Oil & Gas professional, with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK, and then spent 21 years working in The Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of Chartered Institute of Management Accountants (Association of Cost and Management Accountants). |
Abstract
There is a huge unconventional shale gas resource in the remote heart of the Northern Territory with the potential to trigger big new gas developments in Darwin, including export liquefied natural gas (LNG), and underpin the chronically undersupplied East Coast market. And yet despite this promise, the Beetaloo is not universally viewed as a viable commercial project. Nonetheless, the Beetaloo is one of the hottest topics in Australia’s upstream sector, and two of its key operators, Tamboran and Empire, are closing in on final investment decision (FID) for initial gas production. So why are many in the market still sceptical the play will work? To create a definitive answer, we investigate the key factors required to make the Beetaloo commercially viable. We will evaluate what a Beetaloo gas project could look like across a range of resource sizes, estimated ultimate recovery (EUR) from analogue production profiles, and well costs. The work aims to understand the key cost barriers and price hurdles that need to be broached for economic success. From here we can determine the full range of economic pitfalls and potential rewards that lie in wait for ambitious Beetaloo operators.
Keywords: Beetaloo Basin, capex, East Coast gas, EUR, McArthur Basin, Mesoproterozoic, Proterozoic, shale gas.
Anne Forbes is a senior research analyst in Wood Mackenzie’s Australasia upstream research team. Since joining in early 2022, she has worked on oil and gas assets and the domestic market balance across Australia. Prior to Wood Mackenzie Anne spent 8 years at Chemostrat in a technical geological role in the upstream industry. She specialised in stratigraphic analysis and has worked across Australia’s principal producing basins. She has a Bachelors and Masters in Geology from the University of Cambridge, and a PhD in Volcanology from the Open University. |
Angus Rodger leads Wood Mackenzie’s benchmark analysis of global pre-FID delays and deep-water developments, including cost deflation and project evolution studies. Since joining Wood Mackenzie Angus has worked on a variety of upstream projects across Asia and Australasia. An expert in deep-water analysis, he has advised both national and independent oil companies on new business development including stranded gas monetisation, exploration strategy, regional basin screening and country-entry strategies. Angus previously worked in London covering the North Sea and West African upstream sectors. With a background in finance, research and journalism, he is accustomed to drawing on a wide range of information sources and quickly getting to the crux of an issue. He is a regular speaker at leading regional conferences and frequently provides insight on industry trends to leading news channels. Angus holds a BA Hons, Politics with International Relations from the University of Warwick. |
John Gibb is a research director in Wood Mackenzie’s upstream Australasia Oil & Gas team. He provides analysis of economics, strategies and industry trends across the region. John joined Wood Mackenzie in late 2022. He is a successful Oil & Gas professional, with extensive business experience in Australia and internationally. John’s career includes 27 years working with Shell in various upstream and downstream roles. He started with Shell in the UK, and then spent 21 years working in The Middle East, South America, Russia and Australia in various operating and project roles. John graduated from the University of Edinburgh with a BSc degree and is a member of Chartered Institute of Management Accountants (Association of Cost and Management Accountants). |
References
AEMO (2023) ‘Gas Statement of Opportunities March 2023.’ (Australian Energy Market Operator) Available at https://aemo.com.au/-/media/files/gas/national_planning_and_forecasting/gsoo/2023/2023-gas-statement-of-opportunities.pdf?la=en&hash=10261137C785EA7B5A7E0E417A96B700
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Fowler E (2023) Tamboran Resources inks gas sale agreements with Shell and BP. Australian Financial Review, 23 June. Available at https://www.afr.com/companies/energy/tamboran-resources-inks-gas-sale-agreements-with-shell-and-bp-20230623-p5diwb
