Resources Minister Matt Canavan said on Friday that the funding would look at the Gippsland, Otway, Bass and Sorell basins, primarily off the coastlines of Victoria and Tasmania, in the hopes of better defining a gas story for future explorers to flesh out.

 

"Australian jobs and Australian industry have been built up around the plentiful supply of affordable and reliable gas on the East Coast," Canavan said.

 

"But the original reserves that have powered our economy can't last forever.

 

"To ensure Australia continues to make the most of our vast gas resources, it's essential that we support ongoing exploration and development."

 

The government will work with the Bass Strait state governments on the Offshore South East Australia Future Gas Supply Study, aided by the National Offshore Petroleum Titles Administrator and Geoscience Australia.

 

The study will focus on developing a better understanding of the volumes of gas available in the area, which includes the former leading basin for Australian oil and gas production, the Gippsland Basin, and less well understood regions in the Bass and Sorrell basins.

 

Beach Energy was the last explorer to give the Bass Basin a serious shake, drilling a number of dusters, while Santos has previously explored the Sorell, off the west coast of Tasmania near King Island, without success.

 

The Sorell Basin is sparsely drilled, with only three petroleum exploration wells in the basin - Clam-1, Cape Sorell-1 and Jarver-1 - and there is limited stratigraphic data.

 

The government earlier this year released two frontier leases in the Bass Basin that it hopes are lower-risk, with medium term potential to bring new gas to the market. 

 

The Bass Basin has been reasonably well explored, with a total of 45 wells since 1965. 

 

The most recent phase of activity was between 2005 and 2012, when several 2D and 3D surveys were acquired and six wells drilled. 

 

All drilling activity was focused on the Cape Wickham sub-basin. 

 

The new areas include both the Cape Wickham and Durroon sub-basins, the latter of which was last assessed by Bass Oil without drilling.

 

Explorers such as Llanberis Energy, Liberty Petroleum Corporation and 3D Oil have been chipping away at areas of the Gippsland Basin that have received short shrift from past exploration since the early 1970s.

 

Llanberis believes the southern margin of the Gippsland Basin has been written off unfairly, and it has been focused on oil targets up to 700 million barrels oil-in-place in Tasmanian waters.

 

Liberty's giant Dory prospect is a potential lookalike of the 4.4 trillion cubic feet Pluto discovery made by Woodside Petroleum on the North West Shelf across transition between the shallower Central Platform and the Anemone Canyon.

 

Once Australia's premier basin, the Gippsland hasn't seen much in the way of drilling since Apache Energy's failed attempts in 2008.

 

Origin remains active in both the offshore Otway and Bass basins, and is planning to drill up to four wells in coming years. 

 

It is also studying the Trefoil discovery for production through the Yolla-A facilities.

 

3D Oil has been developing a big gas story in the Otway Basin, outwards of Origin's mature Thylacine and Geographe fields, and has 100% of the drill-ready Flanagan prospect which has upside to almost 2.7Tcf, and the much larger but less developed Seal Rocks lead. 

 

Canavan said the new study would help fill in some of the blanks in the southern margin gas story, and seek to identify opportunities to maximise sustainable gas recovery.

 

"In this year's budget we allocated more than $90 million across a range of programs focussed on developing new gas supplies. This includes a $28.7 million package to accelerate the responsible development of onshore gas for the domestic market," he said.

 

"The grant program is open to all states and territories that are prepared to lift bans and moratoriums. It will support projects with the capability of delivering gas to the East Coast market within the next three years."

 

Victoria, Tasmania and New South Wales have all restricted exploration drilling in their onshore areas over the past few years.