March 26, 2020 / 5:26 AM / 11 days ago

Origin defers shale drilling in northern Australia until second half

MELBOURNE, March 26 (Reuters) - Origin Energy will defer shale exploration drilling in Australia’s Northern Territory until the second half of this year in a bid to protect workers from a coronavirus, the company said on Thursday.

Origin, operator of a joint venture with Dublin-based Falcon Oil & Gas Ltd, resumed drilling in the Beetaloo Basin last year after a three-year break when drilling was banned, and had hoped to get first test results around July this year.

It has estimated the Beetaloo Basin contains 6.6 trillion cubic feet of potentially recoverable gas and is testing how much of that might be commercially recoverable.

“Given the unprecedented circumstances brought about by COVID-19,” the company said in an emailed statement, it would halt work at the Kyalla well site and reschedule activity to the second half.

While the site is hundreds of kilometres away from indigenous communities, seen as particularly vulnerable to the virus, an Origin spokeswoman said the decision had been prompted by concerns about bringing materials in for fracking.

“We remain committed to our Beetaloo project which, if successful, has the potential to deliver long-term economic and social benefits,” the company added.

The Beetaloo drilling effort formed part of a capital spending program of between A$530 million and A$580 million for the year to June 2020, excluding its spending on the Australia Pacific liquefied natural gas project. (Reporting by Sonali Paul; Editing by Clarence Fernandez)

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