Australia Neglects its Reserves: Industry Group

The latest Australian Bureau of Statistics (ABS) exploration data confirms an ongoing slump in petroleum exploration, said the CEO of the Australian Petroleum Production & Exploration Association Malcolm Roberts March 6.

"Exploration expenditure is well below trend, especially in offshore basins," he said. “Falling exploration activity has been evident for many years but the latest offshore expenditure numbers are alarming. Offshore activity has fallen to its lowest level since 2004.  Other sources show that only five exploration and appraisal wells were drilled offshore in 2017." 

"Industry is doing all it can to revive exploration, given tough market conditions. Onshore exploration is recovering but offshore activity is still falling. If this trend continues, Australia risks missing its moment to capitalise on rising global demand for energy.  Australia has an exciting opportunity, with regional demand for liquefied natural gas set to almost triple in the next 20 years."

Making an exception for Queensland, he said that state governments failed to understand that they were short-changing the public if they failed to facilitate profit from publicly owned natural resources.

“Some governments understand this simple proposition.  The industry welcomes the leadership being shown by Queensland, South Australia and the Commonwealth. Governments can always complain about gas prices but they should also be doing what they can to encourage new supply," he said. Commonwealth in this context refers to Australia's national government in Canberra.

Spending on downward trend: ABS

The report found the trend estimate for onshore petroleum exploration expenditure fell to A$77.7m (US$60mn) in the December quarter 2017, a decrease of 22.8% or A$22.9m . Expenditure on drilling fell by 22.4% (by A$12.7m) and other onshore petroleum exploration expenditure fell by 21.6% (by A$9.5m).

The seasonally adjusted estimate for onshore petroleum exploration expenditure fell by 16.8% (by A$15.6m) to A$77m in the December quarter 2017. Expenditure on drilling rose by 2% (by A$0.9m) and other onshore petroleum exploration fell by 35.2% (by A$16.6m).

Onshore exploration (A$)

The trend estimate for offshore petroleum exploration expenditure fell by 7.7% (by A$14.9m) to A$177.5m in the December quarter 2017. Expenditure on drilling fell by 21.4% (by A$21.1m) and other offshore petroleum exploration expenditure rose by 6.6% (by A$6.2m).

The seasonally adjusted estimate for offshore petroleum exploration expenditure fell by 14.3% (by A$27.6m) to A$165.6m in the December quarter 2017. Expenditure on drilling fell by 34.2% (by A$33.7m) and other offshore petroleum exploration expenditure rose by 6.4% (by A$6.1m).

Offshore exploration

(Source: ABS)