Article – Rocky outcrops worth billions22 May 2014
16 May 2014
The West Australian
Three rocky outcrops, each no bigger than a kitchen table, have become the most lucrative pieces of real estate in WA’s history.
Their chance discovery will result in the State earning billions of dollars extra in gas royalties from the Browse offshore petroleum project.
The tiny outcrops are part of the North Scott Reef, more than 300km north-west of Cape Leveque, and were found during a recent satellite sweep by Geoscience Australia.
Though no more than 1m above sea level and no more than 3m long, they are regarded as “islands” under the law of the sea because they are naturally formed and “above ordinary high water”. It means they belong to WA, prompting a radical redrawing of maritime boundaries.
The previously unseen rocky outcrops are directly above the Torosa gas field. The Federal Government has previously argued that WA owns as little as 5 per cent of the Browse resource but now grudgingly acknowledges the State may own up to 65.5 per cent of Torosa, which is more than half of Browse. The two other gas fields that make up Browse, Calliance and Brecknock, are not affected.
Geoscience Australia shared its bombshell news to other agencies last week after it dawned on them that data it had collected for a review of Australia’s “territorial sea baselines” had huge ramifications.
“There is nothing extraordinary about this, except the circumstances,” an insider said last night.
The redrawing of maritime boundaries is yet to be ratified but it has sent a shockwave through the Federal Government and the resources sector.
There are fears that Premier Colin Barnett will use his new-found influence over the Browse project to resume his push for the Woodside-led consortium to process the gas onshore at James Price Point near Broome.
The Federal Government has urged the Barnett Government to embrace floating liquefied natural gas technology for the project, with Prime Minister Tony Abbott saying a floating development was better “than not at all”.
Industry Minister Ian Macfarlane said it was in everyone’s best interests to ensure Browse was developed to benefit all Australians. “In order for Australia to maintain its position as an international supplier of oil and gas and an energy superpower, it’s important to continue to develop oil and gas projects,” he said.
Mr Barnett said Geoscience Australia’s discovery of the rocky outcrops meant WA’s ownership of the Browse gas was “potentially significantly higher than previously thought”.
“We don’t know the final figure yet but it will certainly give the State a greater role in decisions over the use of that gas and will also into the future provide more royalty income for WA,” he said.
“WA will work co-operatively with the Commonwealth and the joint venture partners to bring the project into production.”
Woodside declined to comment but it has said that onshore processing of the gas would be uneconomical, costing $80 billion, including $25 billion for the James Price Point development.
Courtesy of The West Australian