CANBERRA: Australia has to continue its search for new offshore oil discoveries or face the risk of being totally dependent on imports, the Australian Petroleum Production and Exploration Association (Appea) has warned. Responding to the Australian Energy Statistics report released by the Department of Industry, Innovation and Science, Appea director for South Australia Matthew Doman said that based on current consumption, and without new discoveries, Australia would be totally reliant on imported oil for transport fuel in around ten years. The report noted that oil, including crude oil, liquefied petroleum gas (LPG) and refined products, accounted for the largest share of Australian energy consumption, at 38% in 2014/15.
Australia imports a relatively large portion of its refinery feedstocks, with imports accounting for some 85% of total refinery input during 2014/15.
The report stated that while most of Australia’s own oil production occured off the north-west coast of Australia, domestically produced grades of crude oil were generally not as well suited for use by local refineries as those sourced from other countries. The decline in domestic refining capacity also contributed to an increase in imports of refined products.
Refined product imports, excluding LPG, grew by 15% in 2014/15, reaching 1 051 PJ, or 28-billion litres. This continued the longer term trend towards imported refined products, which have grown by an average of 9% a year over the last decade and now account for around 45% of total refined product consumption. “The report highlights a worrying trend that could be rectified by successful exploration in the Great Australian Bight,” Doman said on Friday.
“We’ve already witnessed what safe, well-regulated development can deliver the economy with liquefied natural gas (LNG) exports having more than doubled over the last decade, making it the fastest growing energy export for Australia. “We are blessed with abundant resources that can deliver South Australia substantial economic benefits and secure a reliable energy base for industry and manufacturers.”
The report comes days after oil major BP abandoned its plans to explore the Great Australian Blight, following a review of the company’s upstream strategy. BP said that the Great Australian Bight project would not be able to compete for capital investment with other upstream opportunities in the company’s global portfolio, in the foreseeable future.
Doman said while the decision was disappointing, producers Chevron, Murphy Oil, Santos and other companies proposing exploration in the Bight would continue to pursue their plans. “With proper regulatory oversight and appropriate community consultation there is no reason why further exploration cannot deliver South Australia much needed new investment and jobs,” he said.
Australian energy consumption rose by 1% in 2014/15 to around 5 920 PJ, following two years of consecutive decline, and energy productivity rose by 1% during this time. For the first time in more than a decade, energy use in the mining sector fell in 2014/15, with the Department of Industry, Innovation and Science ascribing the decline to cost-cutting measures across the resources sector, and the adoption of less energy-intensive technologies.
Energy production rose by 4% in 2014/15 to 16 711 PJ, supported by growth in coal and gas production. Black coal production rose by 4% during the period to 12 288 PJ, supported by new capacity for export markets and increased domestic demand. Brown coal production also rose by more than 8%, while natural gas production rose by 5%, underpinned by increased coal seam gas (CSG) production.
CSG production accounted for 18% of national gas production and nearly half of eastern market gas production in 2014/15. Crude oil, condensate and naturally occurring LPG production continued to fall – by 6% in 2014/15 – as declining production at ageing fields outweighed new supply.
