Woodside Consortium to Spud Gnarlyknots-1 Well

A consortium comprised of Woodside Petroleum, EnCana and Anadarko will be spudding the Gnarlyknots-1 well this week in the deepwaters of Australia's largely unexplored Great Australian Bight The well is located approxiomately 325 kilometers offshore the coast of Australia in about 4,200 feet of water. The well will be drilled using GlobalSantaFe's drill ship, Glomar Jack Ryan at a cost of A$56 million. This well will be Australia's most expensive well.

Australia's deep waters are seen as the last hope for a major oil discovery to reverse the Australian Geological Survey Organization's prediction that the nation's oil production would halve by 2010. Ever-improving technology has brought a global boom in deepwater exploration and production. "If we are successful, then a whole new hydrocarbon basin could be opened, but on the other hand we have to recognize that the chances are quite small," said Woodside's Southeast Australia Exploration manager Jeroen Bruins.

"It's a remote area so we need to find a reasonable volume of oil. Gas, at this moment, would not be commercial," said Bruins. Only an oil discovery of at least 200 million barrels would make Gnarlyknots-1 a success.