Metgasco calls off Rosella drilling

Cancelled: Metgasco has called off the drilling of an exploration well in New South Wales

Sydney-based Metgasco has called off the drilling of a conventional well in the Australian state of New South Wales a day after announcing it faced delays.

Metgasco said on Friday that the drilling of the Rosella-1 well in PEL 16 would not be going ahead in the near-term, adding that it was currently working to cancel the drilling rig and other service contracts.

The cancellation of the well comes a day after the company revealed the state government had ordered it to suspend all work on Rosella-1 until it could demonstrate it had complied with certain conditions of the licence regarding community consultation.

On Friday Metgasco said it had presented the government with a submission demonstrating that it had fully complied with the licence conditions relating to community consultation.

It added that it expected to find out on Monday if the government was prepared to lift the drilling suspension.

While the suspension could be lifted, Metgasco said it had been notified that police it considered “necessary to provide a safe and lawful environment for drilling to proceed” had been reallocated elsewhere, forcing the company to cancel the well.

New South Wales Police announced on Thursday they had cancelled an operation that would have involved up to 800 officers when the drilling rig was scheduled to arrive at the well site next week.

A group of protestors have been camping on a neighbouring farm to the Rosella-1 site for the past several months in what they had dubbed “the Bentley Blockade”, in a bid to block Megasco’s access to the site.

The police were expected to help assist the drilling rig make its way through the blockade and safely start operations.

Upstream industry body the Australian Petroleum Production & Exploration Association (APPEA) warned that the government's decision on Thursday to suspend the well had set "a damaging precedent" for resource exploration in the state.

"Investors should be concerned about what constitutes 'genuine and effective consultation' in NSW," APPEA said in a statement on Thursday.

"The industry is concerned that the presence of protesters at an operational site should not mean that genuine consultation with the community has been ineffective."

The cancellation or Rosella-1 marks another setback for Metgasco and its operations in New South Wales.

It had been forced to suspend its operations targeting coalbed methane in the state following tough new regulations imposed by the government last year.

Metgasco has stressed that Rosella-1 would be targeting conventional gas within its licence area and not CBM.

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