Statoil partners with Petrofrontier in a joint venture shale gas exploration in Australia. Australia is the world’s fourth largest exporter of liquefied natural gas (LNG), which the government stated in May that Australia has adequate shale gas resources to double the reserves of natural gas.

Statoil has farmed into Petrofrontier’s four existing Exploration Permits as well as two pending permit applications in the South Georgina Basin in Australia’s Northern Territories. This is the first time Statoil has set foot in Australia. The company has made substantial investments in the US unconventional gas resources, and identified it as a key growth area. In exchange for payment of the necessary costs of exploration activities in three phases up to $210 million, Statoil will acquire 65% stake in PetroFrontier Company.

Australian Resources Minister said that shale gas resources are mainly located in the middle of Australia, and its reserves are expected to reach 400 trillion cubic feet (equivalent to 11.3 trillion cubic meters). Statoil and its partner will drill about 10 to 20 wells till 2017, while Statoil will commit to contribute USD 25 million for the first phase of the exploration program.

Petrofrontier will operate the first exploration phase of the program while Statoil has secured options to operate from the second phase onwards, in addition to increase ownership interests from 25 to 65% of Petrofrontier’s interests.