PERTH (miningweekly.com) – ASX-listed Buru Energy has come under fire from an environmental group over its plans to develop the Rafael conventional gas and condensate discovery, in the Canning basin.

Buru this week revealed that fellow listed Origin Energy would assign its interest in the Canning Basin joint venture to Buru for a future, capped reimbursement of costs linked to gas production success.

As part of the agreement, Origin will provide Buru with up to A$4-million of the required funding for the Rafael 3D seismic survey, which is planned to be acquired in the 2023 operating season.

Under the terms of the agreement, Buru will provide to Origin future capped staged contingent reimbursement payments of up to a total A$34-million, conditional on the achievement of key Rafael discovery-related development and production milestones. These contingent payments reflect certain past costs and costs related to this transaction as incurred by Origin.

As part of the agreement, Origin will be released from any residual farm-in and rehabilitation liabilities and costs associated with these Canning basin exploration permits

Buru told shareholders that Origin’s exit from the Canning basin provided the company with the autonomy and flexibility to aggressively pursue the commercialisation of its assets in the basin, focused on the Rafael conventional gas and condensate discovery that has been independently assessed to have the potential to hold recoverable volumes of over one-trillion cubic feet of gas and 20-million barrels of condensate.

“Since Origin’s decision in June last year to not support the proposed 2022 Canning basin fieldwork programme, and then its September announcement that it intends to exit upstream exploration on strategic grounds, Buru has worked relentlessly to minimise the impact of this decision on its Canning basin assets, and to maintain momentum for the appraisal and commercialisation of its flagship Rafael conventional gas and condensate development,” said Buru CEO Thomas Nador.

‘We are delighted to now be in the position to be back on ground this year to acquire the critical 3D seismic data over Rafael in support of appraisal drilling next year. We will also be finishing our assessment of the extensive seismic data acquired under the Origin farm-in programme that has already provided valuable insights into regional prospectivity and new play types in the basin.

“This agreement also provides Buru with strategic optionality to extract the highest value for our shareholders from our dominant position in the Canning basin including not only the extensive hydrocarbon resources, but also the potential carbon capture and storage and natural hydrogen resources being developed through our GeoVault and 2H Resources subsidiaries,” he added.

“The structure of the deal reflects Origin’s belief in the Rafael discovery, insofar as any future capped reimbursements to Origin are directly linked to future high value development and production milestones for Rafael gas.”

While Buru is thrilled with the development, NGO Environs Kimberley claims the project has the potential to be "extremely damaging" to the Kimberley.

“The age of climate-destroying methane gas extraction is over if we want to have a safe planet. To propose a project like this in the Kimberley is outrageous. Buru Energy was forced to suspend its oil operations due to the recent floods - this shows how the industry is incompatible with the Kimberley region and its climate,” said Environs Kimberley spokesperson Martin Pritchard.

He noted that Origin’s exit from the Kimberley, announced last year but only made official today, follows a long line of fossil fuel companies including Mitsubishi, ConocoPhillips, PetroChina, Alcoa and Andrew Forrest’s Squadron Energy that exited the region after "wasting millions of dollars of their shareholders' money".

“Origin is clearly eager to rid itself of its Kimberley fossil gas interests at a time when the world is swiftly transitioning to renewable energy. Buru Energy has already cleared tens of thousands of kilometres of tropical savannah vegetation in the Kimberley just so it could survey for gas. The McGowan government needs to step in to stop this madness before Buru can inflict any more destruction on the precious Kimberley,” said Lock the Gate spokesperson Simone van Hattem.

“The Rafael project would involve damaging seismic testing and associated land clearing near the National Heritage listed Martuwarra Fitzroy river.

“If built, this project would industrialise the Kimberley landscape beyond recognition. Well pads, tracks, pumping stations, and a pipeline network would turn the spectacular landscapes of the region into something that looks like the fracking fields of Texas.”

Buru was unavailable for comment when approached by Mining Weekly Online at the time of writing.