In an attempt to search for new sources of gas, U.S. oil major Exxon Mobil Corp. subsidiary Esso Deepwater Gippsland Pty. Ltd. started its A$120 million exploration drilling program in the Gippsland Basin in Australia.

Part of the investment program includes drilling two exploration wells, named Baldfish and Hairtail, by Diamond Offshore Drilling Inc.'s Ocean Monarch semi-submersible drilling rig in the VIC/P70 block approximately 90 kilometers off the East Gippsland Victorian coast. Drilling is expected to take several months and will be in water depths ranging from 350 to 700 meters. Esso Deepwater Gippsland holds a 100% stake in the VIC/P70 block.

"This A$120 million exploration drilling program demonstrates our commitment to bringing new gas supplies to the domestic market," ExxonMobil Australia Chairman Richard Owen said in an Aug. 27 release. "ExxonMobil Australia is also actively considering a potential LNG import project to bring additional supply to the east coast gas market."