Transocean rig on the move as potentially ‘transformational’ offshore drilling campaign inches closer

ConocoPhillips Australia (COPA), a subsidiary of the U.S.-headquartered energy giant ConocoPhillips, has received a green light for its environment plan (EP), which sets a timeline for the start-up of its upcoming Otway exploration drilling program (OEDP) in 2025. This exploration campaign for more Australian gas will be conducted with a semi-submersible rig owned by Transocean, a Switzerland-based offshore drilling contractor.

ConocoPhillips Australia’s exploration program in the offshore Otway Basin aims to identify commercially viable natural gas reserves to help meet Australia’s energy needs. In a bid to undertake exploration activities in offshore permits VIC/P79 and T/49P in Commonwealth waters, the company sought approval for an exploration program off the coast of Victoria and Tasmania.

The proposed Otway exploration drilling program, which was under assessment with the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), has now received the go-ahead from the Australian regulator, enabling seabed surveys and drilling activities encompassing up to six exploration wells. The proposed program will be done in two offshore titles adjacent to existing natural gas developments in the Otway Basin.

The drilling of up to six exploration wells will be conducted in water depths ranging from 53 to 200 meters across the VIC/P79 and T/49P exploration permits. However, the exact timing of the Phase 1 drilling program depends on several factors, including the timing related to the rig’s arrival in the Otway Basin, operational timeframes of other consortium members drilling before the joint venture (JV), and receipt of all relevant regulatory approvals.

ConocoPhillips (operator with 80% stake in the offshore permits) has hired the AHTS vessels from Sea1 Offshore, former Siem Offshore, and the Transocean Equinox semi-submersible drilling rig, which was booked on a two-well drilling contract, signed as part of a 2025 exploration drilling program for the Otway project, according to its partner, 3D Energi, a Melbourne-based oil and gas exploration player whose subsidiary, TDO, holds 20% interest in both permits.

Based on the consortium’s scheduling data, 3D Energi has confirmed that the current drilling timeline indicates the JV will begin its two-well Phase 1 program in 2025. The Australian player is carried by COPA for up to $65 million in gross drilling costs for the two firm exploration wells in Phase 1, but final cost estimates are still being finalized. With data interpretation underway, final well sites for the drilling program are yet to be confirmed.

Noel Newell, Executive Chairman of 3D Energi, commented: “It cannot be overstated how important a milestone this is. The approval is for the JV. EP applications these days require extensive stakeholder consultation and the provision of comprehensive technical, environmental and process information. We at 3D Energi are extremely proud to be part of this outstanding and world-class assessment. 

“This approval sets the stage for our incredibly exciting drilling campaign with the Transocean Equinox, which is currently moving from the NW Shelf to the Otway Basin to ultimately commence a drilling campaign which can provide a transformational event for a company our size, with potential to unlock significant value for shareholders.”

The Australian firm sees the Otway exploration drilling program as “an exciting opportunity” to unlock additional gas reserves in a region said to be critical to the energy needs of the Australian east coast market. With rapidly declining production from the Bass Strait gas fields and the east coast energy crisis, this project is considered increasingly important for ensuring the continued supply of natural gas to Victoria and the broader east coast market, as the proximity to existing infrastructure and the east coast gas market significantly enhances the commercial viability of any potential discoveries.

This exploration program is targeting low-risk gas prospects with direct hydrocarbon indications (DHI) in the offshore Otway Basin, renowned for its exploration results during the drilling of similar prospects. The success of this program could position 3D Energi as a key player in meeting the future energy demands of Victoria and the east coast market more broadly.

With the acceptance of the environment plan, the focus is shifting to the next regulatory steps, such as obtaining well operations and safety approvals from NOPSEMA, involving the submission and review of the well operations management plan (WOMP) and the safety case revision, which outline the operational and safety protocols that will guide the drilling program.

Moreover, 3D Energi highlights that the Otway exploration drilling program focuses on minimizing environmental impacts through rigorous risk assessments and comprehensive mitigation strategies. The impacts will be closely monitored, with continuous reporting and adaptive management measures in place to address any emerging concerns.

NOPSEMA’s acceptance of the EP is deemed a critical milestone for the joint venture in the lead-up to the exploration program. This project is described as a very important part of meeting the future energy needs of Victoria. In 3D Energi’s view, the Otway Exploration Drilling Program represents “a compelling opportunity” to secure energy supplies for the growing east coast gas market.

“With proximity to key infrastructure and commercial viability, this drilling campaign could be transformational for 3D Energi, providing long-term growth opportunities and securing a future role as a reliable gas supplier in the region,” concluded the Australian firm.

ConocoPhillips has also been working on several oil and gas projects outside Australia. Last year, the energy giant kicked off oil production from a project tied to one of the fields in the Greater Ekofisk Area in the North Sea.