Oil and gas supermajor Chevron described the Great Australian Bight as one of Australia’s most prospective frontier hydrocarbon regions, but said the suspension of its exploration endeavours in the area was because it could not compete in the current low oil price scenario.
Chevron Australia managing director Nigel Hearne commented: “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 realize its potential.”
The company pointed said the decision was purely commercial and was not as a result of government policy, regulatory, community or environmental concerns.
“We have invested billions of dollars in Western Australia to commercialize our large gas resource base through the Chevron-operated Gorgon and Wheatstone LNG and domestic gas facilities and expect to be here for decades to come,” Hearne said.
Chevron decision to suspend exploration plans in the Great Australian Bight comes after BP withdrew its environment plan submissions in December 2016 for an exploration drilling program of the Stromlo-1 and Whinham-1 wells.
The Australian Petroleum Production & Exploration Association (APPEA) described Chevron’s decision as disappointing for the broader Australian community and the need for new local energy supply, notably South Australians.
APPEA’s Director South Australia Matthew Doman said success in the Bight would release Australia’s reliance on imported oil and deliver much-needed new investment 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.
“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,” said Doman.