A Tiny Rock Sitting On A Remote Reef Is Now The Most Valuable Piece Of Real Estate In Australia

The beach in Broome, Western Australia. Patrick Riviere/Getty Images .

A chance finding of a small rock outcrop poking above the high water mark on a remote reef hundreds of kilometers off the North West of Western Australia will bring an unexpected jackpot return of billions of dollars in gas royalties to the state.

Western Australia originally was allocated just a 5% share of the Torosa gas field because the field is so far off the coast, about 300 kms north west of Cape Leveque. The rest of the field went to the Commonwealth.

However, Geoscience Australia, the national mapping organisation, discovered during survey work that the rocks measuring about one metre by three metres on North Scott Reef are above the high water mark.

This means that the state owns them and that places the state’s ownership right in the middle of the gas field rather than measured from the coast. The state’s share goes up and the Commonwealth’s falls.

North Scott Reef is a group of atoll-like reefs on the edge of the continental shelf in the Timor Sea.

“This is good news for WA,” Premier Colin Barnett told Business Insider. “It means WA’s ownership share of the Browse gas is potentially significantly higher than previously thought.”

Some estimates put Western Australia’s new share of royalties at between 50% and 65%. The original proportion within WA waters was between 5% and 15%.

The proportion now is being evaluated by experts from WA’s Department of Mines and Petroleum and Geoscience Australia but it is shaping up as very significant.

“We don’t know the final figure yet but it will certainly give the state a greater role in decisions over the use of that gas, and will also into the future provide more royalty income for Western Australia,” Premier Barnett says.

He says the state will work cooperatively with the Federal Government and the resources company joint venture partners to the bring the project to production.

Woodside is the operating partner of the Browse Joint Venture, a proposed floating liquefied natural gas (FLNG) project to commercialise globally significant resources in the Browse Basin, about 425 km offshore north of Broome in Western Australia.

The Brecknock, Calliance and Torosa fields are collectively known as the Browse resources and contain 15.9 trillion cubic feet of gas and 436 million barrels of condensate.

WA Mines and Petroleum Minister Bill Marmion says this is potentially is a great windfall for the State.

“We know it’s very significant and we’re now working closely with the Federal Government to determine Western Australia’s share of the Browse field and it’s exact implications,” he says.

Seven of 13 blocks in the Torosa field will be affected in varying degrees. This map shows the gas field:

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