Australia’s Jan-Mar offshore oil, gas exploration falls

Australia's oil and gas exploration spending declined during January-March from a year earlier, as the country continued to prefer onshore to offshore exploration.

Australian total exploration spending declined to A$244.4mn ($161mn) during January-March, down by 19pc from A$301.5mn a year earlier, according to the Australian Bureau of Statistics (ABS). The decline in spending was largely the result of a 35pc reduction in offshore spending to A$89.1mn in January-March this year from a year earlier. Onshore spending comprised A$155.3mn of total exploration spending during January-March, falling by 5pc on the year.

A sharp decrease in spending from Western Australia (WA), where several projects in the Perth Basin have recently moved into the production phase, led to a fall in total spending. Declines in WA spending were partly offset by rises in Queensland and the Northern Territory (NT), where the onshore Beetaloo basin attracted drilling teams. Queensland, Australia's largest onshore gas producing state, is likely to provide an increasing proportion of east coast domestic gas from its coal bed methane fields.

The decline in offshore exploration during January-March on the year continued a 3½-year trend. Offshore expenditure last exceeded onshore spending during July-September 2019. Australian exploration spending had declined by 12pc on the year to A$984m in 2022, with onshore spending of A$597mn higher than offshore spending of A$387mn, given a weakening investment environment.

But both onshore and offshore exploration spending rose on the quarter during January-March this year. Onshore spending rose by 13pc from A$138mn in October-December 2022, while onshore outlays increased by 24pc from A$72.1mn, which was the lowest figure recorded since Covid-19 reduced spending during April-June 2020.