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PERTH (miningweekly.com) – US oil and gas major Chevron will abandon its $400-million exploration programme in the Great Australian Bight, saying drilling in the region could not compete for capital in Chevron’s global portfolio, given the low oil price environment.
“We appreciate the strong support from governments, regulators and the local community for our plans to explore for hydrocarbons offshore South Australia. We are confident the Great Australian Bight can be developed safely and responsibly and we will work closely with the interested stakeholders to help realise its potential,” Chevron Australia MD Nigel Hearne said.
He noted that this was a commercial decision and was not owing to government policy, regulatory, community or environmental concerns.
Hearne, however, reaffirmed Chevron’s long-term commitment to its Australian natural gas business, pointing out that offshore Western Australia was a global focus area for Chevron where the company had access to vast natural gas resources and existing infrastructure.
“We have invested billions of dollars in Western Australia to commercialise our large gas resource base through the Chevron-operated Gorgon and Wheatstone liquefied natural gas (LNG) and domestic gas facilities and expect to be here for decades to come. Through greater collaboration with other producers in Western Australia, Chevron is also pursuing opportunities to accelerate the commercialisation of our gas resource base through non-operated LNG facilities,” he said.
Chevron Australia’s affiliate was recently awarded three new exploration blocks in the Northern Carnarvon basin adding to its significant gas position as the largest resource holder and liquefaction owner.
The Australian Petroleum Production and Exploration Association on Friday said that Chevron’s decision was disappointing, with the industry body’s director for South Australia, Matthew Doman, saying success in the Bight would ease Australia’s reliance on imported oil, and would deliver South Australia much needed investments and jobs.
“Chevron has made clear its view that the resource potential of the Great Australian Bight remains significant, but their decision is a reminder that much-needed investment in developing Australia’s energy resources cannot be taken for granted,” Doman said.
“While several other companies continue to develop exploration plans for the Bight, the international environment for the oil and gas industry is challenging.
“With the oil price halving over the last three years, exploration activity around the world is at very low levels. Global exploration spending is expected to fall this year for the third year in a row to less than half 2014 levels.
“In Australia, onshore and offshore oil and gas exploration is at 30-year lows – due to difficult market conditions, escalating regulatory costs and political bans on energy development.”