Every year, the federal government offers what is called ‘acreage’ (old American habits die hard) in the areas (‘blocks’) beyond state jurisdiction (i.e. beyond 3km from the coast) for petroleum exploration companies to explore for gas and oil deposits in offshore sedimentary basins.
The blocks concerned can be nominated by petroleum exploration companies. From these and other nominated blocks, the minister selects a number of the nominated blocks for public consultation. This selection process considers a range of factors and these include national security and maritime boundaries, environmental regulations, proximity to markets and infrastructure, among others, and this is done in consultation with the state and territory governments and federal government agencies. However, before these blocks are released for bidding, the government undertakes a consultation process. They seek feedback from anyone who has an interest in a specific area and can provide information relevant to exploration in that area. This includes feedback from other government agencies, other users of the area (e.g. fishing, tourism), and the public. Once the blocks to be released are decided, companies are invited to bid on those areas. Once the bids have been submitted, the National Offshore Petroleum Titles Administrator (NOPTA) assesses those bids and provides advice to those deciding which bids have been successful. Successful bidders are offered an offshore petroleum exploration permit. This 6-year title can be renewed for a further 2 periods of 5 years. NOPTA grants the permits on behalf of the relevant authority1.
Upon being granted a permit and providing assorted environmental and safety plans the company which obtained the permit will undertake seismic surveying. This uses reflected and refracted sound waves to gain an understanding of the structure of the rocks underlying the area concerned, and based on that data, the company will identify prospective targets where they consider oil or gas deposits may be present. In order to tap those resources, the company may decide to drill one or more petroleum wells to see if there are correct in their assessment of the target.
This system has been in operation for many years, and has been chugging along its mostly gas-fired way, but something different has happened recently. Back in 2019, 64 blocks of acreage were released, whereas in 2020, 42 blocks were released. In 2021, only 21 blocks were on offer and in 2022 it was only 102. In 2023, I have heard it was 3.
Another indicator of the dropoff in petroleum exploration is to look at the number of petroleum wells drilled. This has also declined dramatically; in 2010 there were over 50 wells drilled in Australia’s offshore jurisdiction, whereas in 2023 there were just 33.
I presume that those in the petroleum industry, despite mostly being either climate change deniers or unconcerned about the fate of many millions of people from climate change, can see the writing on the wall. That writing indicates the fossil fuel industry is in terminal decline and that industry is looking elsewhere for their profits.
Sources
- https://www.industry.gov.au/mining-oil-and-gas/oil-and-gas/offshore-oil-and-gas/offshore-petroleum-exploration-acreage-release-process
- https://www.energynewsbulletin.net/policy/news/1453134/uncertainty-petroleum-acreage-release
- https://www.woodmac.com/news/opinion/how-will-a-20-year-decline-in-exploration-impact-the-outlook-for-energy-investment-in-australia/#
The precipitous fall in Australian offshore petroleum exploration activity that has occurred over the last few years should not be attributed to the fact that the petroleum industry is a ‘sunset industry’. (Where there is a proven, economic petroleum resource in the ground, it will still be developed – we just will not be burning the product in internal combustion engines). The steep decline witnessed in Australia is not mirrored internationally. The decline in Australian exploration is more a reflection of the perceived prospectivity of Australian offshore acreage by explorers in comparison to acreage available overseas. The ‘low hanging fruit’ offshore Australia were picked years ago and, with the possible exception of offshore acreage in the Great Australian Bight, any undiscovered offshore petroleum accumulations here are likely to be small and remote. There are far more attractive opportunities internationally and hence the apparent lack of interest by the ‘The Majors’ in exploring offshore Australia.
Steve,
Thanks for the info.
I was going to say good, until I read Steve’s comment. I used to be optimistic but we are so fucking stupid that my optimism has completely faded.