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Exxon Mobil (NYSE:XOM) has announced an agreement to acquire a 10 percent stake in Australia’s privately-held Ignite Energy Resources Ltd to explore and develop methane gas reserves in the Gippsland Basin of southeast Victoria state.
It’s an investment in an unconventional fuel driven by the increasing difficulty of accessing territories in Russia, Venezuela, and Saudi Arabia. The field has the potential to unlock 16 billion metric tonnes of methane nearer to the surface and more than 280 billion tonnes deeper down. It is a part of Exxon’s larger investments in the country, which involve a refinery in Victoria and other conventional oil and gas exploration projects. Investors are attracted by Australia’s fair regulatory systems, stable politics, and its location close to the energy-hungry markets in Asia.
“Over the next 12-18 months Exxon Mobil and Ignite Energy Resources will work together to evaluate and assess the natural gas potential in the deeper coal seams of the license and determine whether it can be commercially produced,” the companies said in a joint statement Wednesday.
Environmental concerns have been raised in Queensland but environmentalists are likely to be less vocal in Victoria, which may view the production of gas as a welcome change from the coal-burning fumes that drive its current energy sources.
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