PERTH (miningweekly.com) – The Australian Petroleum Production and Exploration Association (Appea) has warned that the stalled oil and gas exploration in Australia could prove an economic risk.
Using the latest data by the Australian Bureau of Statistics (ABS), which indicated that the slump in petroleum exploration in Australia continues, Appea CEO Dr Malcolm Roberts warned that if the trend continued, Australia risked missing its opportunity to capitalise on the rising global demand for energy.
The ABS last week reported that while total mineral exploration expenditure increased by 2.3% to A$457-million in the December quarter, petroleum exploration expenditure fell by 13.2%, to A$254.3-million.
Onshore exploration expenditure fell by 22.8%, or nearly A$23-million, to A$77.7-million, while offshore expenditure fell by 7.7%, or A$14.9-million, to A$177.5-million in the December quarter.
“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,” Roberts said.
“This situation is happening despite deep cost-cutting by the industry. Companies have almost halved the cost of exploration wells, putting downward pressure on prices and squeezing more activity from tight budgets.
“Industry is doing all it can to revive exploration, given tough market conditions. Onshore exploration is recovering but offshore activity is still falling.”
Roberts warned that if this trend continued, Australia risked missing its moment to capitalise on rising global demand for energy, adding that the country had an exciting opportunity, with regional demand for liquefied natural gas set to almost triple in the next 20 years.
“All governments should be alarmed by the trend of falling exploration. The community owns the resources and needs to attract risk capital to discover and convert resources into jobs, revenue and export dollars.
“The community should be concerned if governments squander the opportunity to secure a return from public resources.”