LAKES Oil does not have a permit to produce gas in Seaspray, according to Gippsland South MLA Peter Ryan.
Seaspray residents had feared the moratorium on unconventional gas exploration and mining, which was extended by the state government late last year, would not prevent further exploration drilling from going ahead.
They asked for National Party state MPs, including local member and Deputy Premier Mr Ryan, to protect farming communities.
But Mr Ryan said Lakes Oil only had been grant a permit for exploration.
“There are permits at the moment which have been granted for exploration. There are no permits in relation to production, that is an entirely separate process,” he said.
“What the company is looking to do is try to prove up whatever might be the capacity for ultimate production out of there, but it has to know for a start if there’s anything worthwhile producing in a commercial sense.
“To enable it to do that, it has to file applications with the department (of state development) even under its exploration license before it can undertake this sort of work.
“People can be assured (the permit) is only related to exploration. There cannot be production unless and until an entirely separate process, which is very rigorous, is undertaken.”
Lakes Oil chairman Robert Annells said when announcing the application for the exploration permit that the Wombat 5 exploration was inspired by conventional discoveries both in Australia and overseas in recent times.
“We believe our company can achieve commercial gas production using traditional methods to recover gas from the ‘weathered’ zone at the top of the Strzelecki Formation, proved to be present over a wide area in Gippsland,” he said.
He said Lakes Oil had looked at the conventionally drilled and successful Longtom gas field in Bass Strait which he described as a commercial winner.
“If successful, Wombat 5 will not only commercialize the entire Wombat structure, but potentially the Macalister, Trifon and Gangell fields as well.
“This could deliver a significant amount of gas at a time of rising prices and projected shortages,” he said.
