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PERTH (miningweekly.com) – Norway-based Equinor has decided to discontinue its exploration drilling plan in the Great Australian Bight, just months after receiving environmental approval for the endeavour.
The company said on Tuesday that following a holistic review of its exploration portfolio, Equinor had concluded that its project in the Ceduna sub-basin, offshore South Australia, was not commercially competitive compared with other exploration opportunities within the company.
“The approval of the Stromlo-1 exploration well Environment Plan confirmed our ability to safely operate in the Bight. However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive,” said Jone Stangeland, Equinor’s country manager for Australia.
“We will engage with the federal and state authorities regarding our decision to discontinue the exploration programme. We hold an exploration permit offshore Western Australia and will maintain other ongoing interests and activities in Australia,” Stangeland said.
Federal Resources, Water and Northern Australia Minister Keith Pitt said Equinor’s decision to discontinue its oil exploration program in the Great Australian Bight was disappointing but stressed that the company was not leaving Australia.
“Equinor has made it clear this was a commercial decision and the company will continue to be part of the Australian oil and gas industry. I know many will find Equinor’s decision not to proceed with this oil exploration project in the Great Australian Bight extremely disappointing, and it is particularly hard for South Australia.
“The government remains committed to encouraging the safe development of Australia’s offshore petroleum resources, which is overseen by a world-class independent regulator in the National Offshore Petroleum Safety and Environmental Management Authority,” Pitt said.
“The Bight basin remains one of Australia’s frontier basins and any proposals for new oil and gas fields in this area will be assessed fairly and independently.”
The Australian Petroleum Production and Exploration Association (Appea) said on Tuesday that exploration success in the Bight could have eased Australia’s reliance on imported oil and delivered South Australia a much-needed new investment.
Appea’s director for South Australia, Matthew Doman, noted that a 2018 study found that the successful oil exploration in the Great Australian Bight could see the creation of more than 2 000 jobs in South Australia and generate over $7-billion in average annual tax revenue to the federal and state governments over the next four decades.
“Successful development could also boost our energy security. Australia’s oil production has fallen significantly over the last ten years, and we now import over 80% of the oil we use.
“While our energy mix is changing, all credible analysis shows Australia will use a lot of oil and gas for decades to come. The proposed exploration activity had been subject to an extreme campaign of false and exaggerated claims that deliberately overstated the risks and ignored the potential benefits.
“Of course, any exploration and development have to be done in an environmentally safe manner. We have to make sure there’s no negative impact on existing industries or coastal communities – and the industry remains committed to that,” Doman said.