US oil major Chevron has decided to discontinue its exploration program in the Great Australian Bight, according to the country's industry body.
BP dropped its plans for drilling two deepwater wells in the area after a tussle with Australia's National Offshore Petroleum Environmental Environment Agency (NOPSEMA), against a backdrop of protest from environmental groups over drilling in the Great Australian Bight. BP had said the project would not be able to compete for capital investment with other upstream opportunities.
Earlier this year, an Australian Senate Inquiry into drilling in the Bight mostly supported drilling, however. Norway's Statoil then has signed a swap agreement with BP and was granted regulatory approval to take over two exploration permits, reviving prospects of drilling in the basin.
Today, the Australian Petroleum Production & Exploration Association (APPEA) said: "Chevron’s decision to not continue its Great Australian Bight exploration program is disappointing – for the wider Australian community who need new local energy supply, and for South Australians who would have benefitted from the activity."
In October 2013, Chevron Australia acquired two deepwater exploration permits (EPP44 and EPP45) in the Great Australian Bight – a deepwater frontier basin approximately 300km west of Port Lincoln off the southern Australian coast.
On its website, Chevron states: "While the Great Australian Bight is one of Australia’s most prospective frontier hydrocarbon regions, in the current low oil price environment it was not able to compete for capital in Chevron’s global portfolio."
APPEA’s Director South Australia Matthew Doman said: "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.”
“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.”