Shell, Chevron step up Australia gas drilling

SYDNEY: Royal Dutch Shell Plc and Chevron Corp are stepping up exploration off Australia to increase natural gas reserves and supply north Asian markets including China as oil discoveries dwindle.

Australia is among San Ramon, California-based Chevron's three priority exploration areas, said Colin Beckett, an executive at Chevron in Australia. Alongside Brazil, it ranks third in exploration success in the past decade, lagging behind Angola and deepwater US, Wood Mackenzie Consultants Ltd. said.

Australia, the world's seventh-largest liquefied natural gas exporter, may more than double LNG sales in the six years ending June 2011, to A$7.3bil (US$5.6bil), a government forecaster said in March. ConocoPhillips and Woodside Petroleum Ltd are among explorers that found at least five trillion cubic feet of gas last year, bolstering record reserves.

“Australia has about 10% of the LNG market in north Asia,'' Beckett said in an interview. “That under-represents what we have to offer. We should, and will, grow our market share.''

Beckett is among speakers at the Australian Petroleum Production and Exploration Association's 2006 conference, which started yesterday on the Gold Coast in Queensland.

Claude Mandil, executive director of the Paris-based International Energy Agency, and Australian Industry Minister Ian Macfarlane were also due to address the three-day conference. Australia's LNG export revenue growth may almost match iron ore in the six years ending June 2011, and help to compensate for dwindling oil reserves. – Bloomberg

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