The Wellington Shire Council says it is neither supportive of nor opposed to Esso's move into the onshore coal seam gas exploration industry.
Esso has signed a deal with Ignite Energy Resources to buy into an exploration licence area stretching from Yarram to Bairnsdale.
Esso says the project could have benefits for agricultural communities and says it will work closely with landowners.
Wellington Shire Mayor Peter Cleary says he has some concerns but is cautiously optimistic.
"Esso has always been a great community industry I guess," he said.
"This is a new venture, we haven't formed a position.
"We are optimistic that perhaps it will provide economic opportunities in the future but we need to know a little bit more about it and we have to make sure that our concerns about community safety and its impact on the environment are looked after."
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