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The oil fields of Australia have been in the news recently, with big players showing plenty of interest and making investments. The latest addition to that list of investors is Apache (NYSE: APA ) . Apache has recently declared that it will start development of the Balnaves oil field offshore Western Australia.
Balnaves is located in the Triassic Mungaroo formation adjacent to the Brunello gas field. Apache discovered the oil field in 2009 during exploration and drilling in the Julimar-Brunello complex. The first production from the oil field is scheduled in 2014. The gross peak production is expected to be about 30,000 barrels of oil per day. The reserves of the oil field are estimated to be around 17 million barrels of oil and 30 billion cubic feet of gas. Apache has also agreed to lease floating production storage and offloading from Bumi Armada.
Lots of companies are investing in the Australian oil fields which are rich in oil and gas reserves. This is Apache's third oil development project since 2007, and it is poised to make Apache one of Australia's leading oil producers. Apache also has a presence in the Wheatstone project in Western Australia with Chevron (NYSE: CVX ) , Shell (NYSE: RDS-A ) , and Kuwait Foreign Petroleum Exploration Co.
The demand for oil and natural gas in developing economies like India and China has been increasing with the expansion of their cities and industries. China, Asia, and the Middle East together are expected to generate almost 95% of net growth in the oil sector. The Australian oil fields being closer to the Asian markets provide operators with good opportunity. A strong foothold by Apache in the Australian fields will help the firm to earn higher revenue by serving these markets.
Apache is making its presence felt in most of the important oil and natural gas fields all over the world. This would aid the company in serving different potential markets and would be an advantage over companies that don't have a much presence in Australia to serve the expanding Asian market. The stock has good prospects and is worth watching.
Fool contributor Abantika Chatterjee does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.