Industry News - Crude Crunch Induces DMP to Offer New Licences despite Environmental Fears

03 Oct 2011 • by Natalie Aster

BMI View: Despite some public opposition to offshore drilling, officials have opened bidding for a new set of licences in Western Australia. The move is part of a plan to reverse Australia's crude oil and refined products deficit, which BMI expects to grow from US$20.2bn in 2010 to US$33.5bn by 2020.

Western Australia's Department of Mines and Petroleum (DMP) has offered nine new exploration blocks in its September licensing round, the second such release this year. Six of the blocks are in the onshore Perth Basin, two are located in the shallow waters of the Northern Carnarvon Basin and one is in the largely unexplored Canning Basin.

The minimum work commitment on the blocks requires the acquisition or reprocessing of seismic data within the first two years followed by the drilling of at least one well over the next two years. Bids on the September acreage release close March 8 2012.

 

Table: Key Players -- Australia Oil And Gas Sector

Company

2009 sales (AUDbn)

No. of employees

Year established

Total assets (AUDbn)

Ownership

Shell Australia

na

3,000

1901

na

100% RD Shell

BP Australia

na

1,900

1920

na

100% BP

Woodside

4.12

3,099

1954

19.87

34% RD Shell

Esso Australia

na

na

1927

na

100% ExxonMobil

Santos

2.10

1,679

1954

11.36

public

BHP Petroleum*

7.20

na

na

7.2

100% BHP Billiton

Caltex Australia

na

na

1941

na

100% Chevron

Chevron

na

na

1953

na

100% Chevron

ConocoPhillips

2.20

na

na

10.7

100%ConocoPhillips


* Petroleum Division; na = not available. Source: BMI

 

In the 2009 round interest in blocks outside the Carnarvon Basin, which is a proven hydrocarbon basin, was limited. This may well be the case again, with bids for the Canning block likely to come predominantly from minor domestic players and independents. The two Carnarvon Basin blocks may attract interest from current operators in the region such as Chevron and Woodside Petroleum.

Australia's 2010 licensing round garnered an unfriendly reception in the Australian press following the Montara oil spill offshore Australia in late-2009 and the Macondo disaster in April 2010. Resources Minister Martin Ferguson acknowledged at the time that the government was under pressure to impose a moratorium on further acreage releases. This pressure may explain the predominance of onshore blocks in the most recent licencing round.

 

Australian Oil Production, Consumption And Imports(2000-2015)

e/f = estimate/forecast. Source: Historical data -- EIA. Forecasts -- BMI


Officials are attempting to balance environmental concerns with broader industry objectives. Australia is currently running a trade deficit in crude and processed oil products that amounted to US$20.2bn in 2010. Based on our consumption and production forecasts,

BMI expects this to hit US$33.5bn by 2020. Officials have clearly prioritised the development of new acreage in order to reverse this growing dependence on foreign oil.

Gas Trade Surplus to Expand

In sharp contrast to the oil trade, Australia is running a healthy trade surplus in gas. This is estimated to have hit US$7.43bn in 2010 and is expected to rise to US$37.97bn in 2020. The growth comes from the development of several major liquefied natural gas (LNG) projects that will propel gas exports to around 80bn cubic metres (bcm) by 2020 against the 24.2bcm shipped in 2009.

Related Reports:

Australia Oil and Gas Report Q4 2011

Thailand Oil and Gas Report Q4 2011;

Vietnam Oil and Gas Report Q4 2011;

Singapore Oil and Gas Report Q4 2011;

Pakistan Oil and Gas Report Q4 2011;

Japan Oil and Gas Report Q4 2011;

Taiwan Oil and Gas Report Q4 2011;

Hong Kong Oil and Gas Report Q4 2011;

Cameroon Oil and Gas Report Q4 2011;

Indonesia Oil and Gas Report Q4 2011. 

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