China National, Reliance Win Australia Drill Permits

China National Offshore Oil Corp., the nation's largest offshore oil producer, Total SA and India's Reliance Industries Ltd. won oil and gas exploration permits in Australia.

Hess Corp., Santos Ltd. and Woodside Petroleum Ltd. also won offshore licenses in the bidding auction, which will result in an investment of more than A$800 million ($688 million) on exploration over the next six years, Industry Minister Ian Macfarlane said today in an e-mailed statement.

Australia awards oil and gas exploration permits depending on the amount of exploration work bidders pledge to carry out. China National Offshore, a customer of the country's North West Shelf liquefied natural gas venture, hasn't until now explored in Australia.

"It's good to see new players in the market," Macfarlane said in the statement. Twenty-one bids were received for the 11 licenses, he said.

China National Offshore's CNOOC Australia E&P Pty unit won a license in the Bonaparte Basin off northern Australia, to the west of ConocoPhillips's producing Bayu-Undan gas and condensates field. The company, which beat two rivals, pledged to spend A$162.1 million over six years, including drilling five wells in the first three years and five wells in the subsequent period, the government said in the statement.

Total Bid

Paris-based Total, Europe's third-biggest oil company, beat three other groups for two permits also in the Bonaparte Basin, to the south of the CNOOC license. It pledged to spent A$72.6 million in one permit, and A$151.6 million in the other. Total is a partner in Inpex Holdings Inc.'s proposed Ichthys LNG project in the Browse Basin, further to the west.

Reliance, owner of the world's third-biggest refinery, also won a license in the Bonaparte Basin, beating one rival bidder. It proposed to spend A$29.8 million over six years, including drilling one well.

Woodside, Australia's second-biggest oil and gas producer, won a permit in the Carnarvon Basin with a pledge to spent A$196.2 million in the first three years, including drilling nine wells. Four other groups bid. Santos, the nation's third-biggest producer, won a permit in the Sorell Basin near Tasmania, with a pledge for A$38.1 million of work over six years.

Samson International (Australia) Pty won two permits in the Northern Arafura Basin off the northern coast, while Gerald Nelson won two permits in the Carnarvon Basin and Goldsborough Energy won a license in the Bonaparte Basin, the government said.