Australia’s 2019-20 oil, gas exploration spending rises

Australia's oil and gas exploration spending edged up in the 2019-20 fiscal year to 30 June to A$1.26bn ($926mn) from A$1.25bn in 2018-19 because of higher onshore exploration spending in Queensland, which offset a decline in spending in offshore Western Australia, according to the latest official data.

The decline in offshore exploration expenditure in 2019-20 largely reflected a sharp fall in spending to a near 29-year low for a quarterly period. Offshore spending in the April-June quarter fell to A$66.6mn, down by 71pc from A$234.3mn during the same period in 2019. It was also more than 50pc below the A$141mn spent in the January-March quarter and the lowest quarterly spend since A$64.8mn in July-September 1991, the Australian Bureau of Statistics (ABS) said.

The decline in exploration spending in the latest quarter reflected a dramatic slide in global oil and gas prices following the impact on energy demand from the Covid-19 pandemic, which prompted all Australian upstream firms to defer exploration spending.

The lower April-June offshore spending led to total offshore spending falling to a 20-year low of A$593.2mn in 2019-20, down by 26.8pc from A$810.9mn in 2018-19 and the lowest exploration spend offshore Australia since A$593mn in 1999-00 on a seasonally adjusted basis, the ABS data showed. Most of Australia's exploration activity is related to gas as the country vies with Qatar as the world's largest LNG exporter, but relies on crude and oil product imports to meet domestic demand.

By contrast, onshore exploration spending rose to a five-year high of A$665.8mn in 2019-20 from A$437.6mn in 2018-19 and the largest annual spend since A$489.8mn in 2014-15, the ABS data showed. Most of Australia's onshore gas production is from coal-bed methane fields in Queensland, with a majority of the output used as feedstock for the three LNG plants located at the port city of Gladstone.

There has been an increase in onshore exploration activity in the Perth basin of Western Australia and in the Northern Territory.

Source: argusmedia.com