CSIRO researchers looking at well and surface samples have identified some of the important elements of a "petroleum system" in the Aure Scarp region under investigation.

"CSIRO was commissioned by InterOil to find evidence of these elements to help determine whether further and more detailed exploration would be justified in the area," says Mr Tony Allan of CSIRO Petroleum. The key elements of a petroleum system are described as:

1. A reservoir unit with evidence of oil and/or gas migration and entrapment

2. A likely source rock which could generate oil and/or gas

3. Indications of the right combination of connected source, reservoir, seal rocks and geological timing.

Recognition of these elements is necessary to reduce risk for any future exploration, drilling or seismic surveys.

"To identify these elements, the multidisciplinary project team at CSIRO has provided technical evaluation of the Pale Sandstone and other material collected from two exploration wells drilled by InterOil and from surface material," says Mr Allan.

Analysis indicates there are two sandstone reservoirs of significance - the Upper and the Lower Pale Sandstones. Both have good reservoir characteristics.

"Microscopic studies of the Pale Sandstone indicate there is good preservation of reservoir quality porosity and permeability at depth, which is very important," says Mr Allan. "Our strontium isotopic study shows the Pale Sandstone is likely to be entirely of late Cretaceous age (65 to 83 million years old)."

Mr Allan says the findings are significant as the older Toro Formation and late Jurassic sandstone reservoirs (aged between 140 and 155 million years) were considered until now to be the only significant reservoir sands in the Papuan Basin.

According to Dr Simon George of CSIRO Petroleum the results indicate oil is possibly being generated from two source rock types.

"The bitumen, or black organic matter, we have collected from the wells appears to be from Jurassic-aged source rock [145 to 210 million years ago]," Dr George explains.

"However, a nearby surface sample from an anticline [dome shaped fold in rock strata] suggests there is also a younger source rock generating hydrocarbons in the area, possibly of Tertiary age [younger than 65 million years], and containing land-derived organic matter. This means there is potential for oil generation in rocks of quite different ages."

The team has also been looking at: characterisation of the bitumen in the Pale Sandstone;

measurement of source rock properties, maturation trends and thermal history of well samples critical to a broader basin analysis study; depositional modelling of the Pale Sandstone to predict where sands may have been deposited.

InterOil CEO Phil Mulacek says the CSIRO reports confirms their belief in the prospectivity of the Eastern Papuan Basin and is enabling the InterOil exploration team to understand critical aspects of the petroleum geology at an earlier stage than would have been previously possible.

"We are particularly pleased with the integration of different technical disciplines, providing a depth of expertise not usually available to a small oil company," says Mr Mulacek.

"Through CSIRO analysis of the core samples we can firstly confirm the Pale Sandstone is a significant reservoir quality sandstone, secondly that the Pale is laterally extensive - a broad exploration play fairway - and, thirdly, we have demonstrated oil generation, migration and entrapment."

Mr Allan (CSIRO) believes this is an exciting project because although surface indicators of oil in the area have been known since before World War Two, major oil companies have more recently regarded it as a high risk frontier region - so very little is known in detail of its petroleum geology.

He says that while this is not an actual oil discovery, it shows that essential ingredients have been found.

"This is a real 'grass roots' project in which very appropriate CSIRO expertise and specialist technologies are being applied to fast track the critical early phase of an exploration program," he says.

"This is also a co-operative research project of great scientific interest to all participating CSIRO specialist groups that builds on CSIRO experience in the Papuan Basin.

"CSIRO has provided InterOil with good evidence to support their continuing oil exploration program and reduce the risks on any further exploration wells."

More information: Mr Tony Allan, CSIRO Petroleum 61 (0)2 9490 8742 Email: Tony.Allan@csiro.au