ConocoPhillips announced on Nov. 17 that it discovered gas off the coast of southeastern Australia during its maiden exploration drilling campaign in the Otway Basin. The company began drilling the Essington-1 well on Nov. 1 in waters near the state of Victoria. Initial wireline logs showed gas columns across two target zones, indicating the presence of a potentially significant resource.
The company said it will continue operating the well for about two more weeks to complete remaining tests and gather additional geological data. Afterward, the rig will shift to a second exploration well scheduled for December. The drilling program aims to evaluate the scale and commercial potential of the basin’s gas accumulations.
Jan-Arne Johansen, the company’s country president, described the early findings as a positive step for the project. “We look forward to continuing drilling our second exploration well in December,” he said. He added that the discovery represents the first successful gas find in the region in four years, highlighting the renewed interest in Australia’s offshore basins.
Exploration Program Details
The Otway Basin permit is jointly held by ConocoPhillips, Australia-based 3D Energi, and Korea National Oil Company. ConocoPhillips entered the acreage in 2019 through a partnership with 3D Energi during a period when it was divesting its stake in the Darwin LNG project and associated offshore gas fields. Korea National Oil Company joined the venture in May, bringing additional technical and financial support to the exploration plan.
Essington-1 is the first of six wells planned across two permits under the current campaign. The partners also have an option to drill up to four more wells, depending on the results of the initial phase. According to ConocoPhillips, once Essington-1 is fully assessed, it will be plugged and abandoned under standard procedures before crews move to the second well. Each well is expected to provide key information on reservoir quality, gas saturation, and long-term production potential.
3D Energi has promoted the Otway Basin as one of Australia’s most underexplored offshore regions, with several prospects identified through seismic surveys. Company officials have said the basin could play a more prominent role in national supply if new resources are proven.
Market Context and Outlook
The joint venture aims to determine whether the newly identified gas can contribute to the east coast market, where analysts forecast supply shortfalls beginning in the late 2020s. Demand from households, industries, and power generators has remained steady, while output from several mature fields continues to decline. Policymakers have warned that new developments are needed to maintain reliable domestic supply.
ConocoPhillips also operates Australia Pacific LNG in Queensland, a major exporter of liquefied natural gas. In recent years, the federal government has cautioned LNG producers that export restrictions could be imposed if domestic requirements are not fulfilled. The development of additional gas fields in the southeast could help ease pressure on the market and reduce the risk of future constraints.
Industry analysts noted that an offshore discovery in the Otway Basin could provide strategic benefits by diversifying supply sources. The region is located closer to major consumption hubs than northern basins, reducing transportation and processing challenges. However, commercial viability will depend on factors such as reservoir performance, development costs, and regulatory approvals.
3D Energi’s shares rose nearly 35% to A$0.16 by midsession following the announcement, reflecting investor optimism about the early results. The company said further updates will be issued as drilling progresses and more data becomes available.
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