Australia's Petroleum Resources - the Challenge for Australia

10 April 2001

Warren Entsch, Parliamentary Secretary to the Minister for Industry, Science and Resources, today acknowledged that if Australia was to prevent a medium-term decline in indigenous oil production it needed to discover another major oil province.

"Clearly we need to attract petroleum explorers to frontier areas, and this will have to be done in competition with other nations seeking to promote their own exploration potential," he said.

"While we'll continue to tap resources in the established oil provinces, such as the North West Shelf, any new exploration finds in these areas are likely to be too small to replace the oil that is currently produced.

"Australia has some 40 offshore basins that display signs of petroleum potential. About half of these basins are unexplored.

"Only by encouraging exploration in these frontier area can Australia hope to maximise our chances of finding a new, large oil province."

Mr Entsch was commenting on a paper, Understanding Australia's petroleum resources, future production trends and the role of the frontiers, delivered today at the APPEA Conference in Hobart by Dr Trevor Powell, Deputy CEO of Geoscience Australia.

In the paper, Dr Powell states that relative to its needs over the last 30 years, Australia has enjoyed a high level of petroleum production from Bass Strait and offshore northwest Australia.

Today, remaining crude oil and condensate (light oil) reserves are at an historical high point largely due to condensate in gas fields, which now represents fifty-six per cent of reserves. Gas reserves are also very high.

Remaining crude oil reserves have remained relatively constant over the last decade, but the proportion represented by smaller fields discovered off northwest Australia has continued to grow as Bass Strait reserves have been produced.

Although crude oil production is currently at record levels, it is expected to decline in the medium term. Crude oil discoveries currently being made, and those projected to be made in the near future, are not large enough to sustain current rates of production.

Although condensate production is expected to increase, the rate of increase is constrained by the development timetable for the associated gas reserves. The anticipated growth in condensate production will not be sufficient to replace declining oil production. This decline and associated rise in liquid hydrocarbon imports would have serious consequences for Australia's balance of payments.

Dr Powell noted that although prospectivity of basins off northwest Australia remains high, indigenous production can only be sustained in the longer term if a significant new oil province can be found.

"Australia's oil discovery rate can be maximised by diversifying exploration effort into frontier basins whilst fully exploring the prospective limits of the established hydrocarbon-bearing basins," said Dr Powell.

"We still have a remarkable number of basins that have received little or no exploration. Whilst there is no substitute for a discovery to stimulate exploration in poorly known areas, demonstrating that petroleum has been generated and migrated is the key to attracting continued exploration interest," he said.

Mr Entsch agreed with Dr Powell's assessment and congratulated Geoscience Australia on the research it undertakes to assess the likelihood of petroleum occurrence in offshore regions of Australia.

"The Government through Geoscience Australia has a clear role to play over the next few years to help stimulate exploration activity in frontier areas," Mr Entsch said.

"The pre-competitive data generated by Geoscience Australia is fundamental to our ability to attract exploration companies and investment dollars to Australia.

"Based on past efforts we know that where new knowledge on resource potential is created, further exploration effort follows."

Topic contact: Last updated: October 4, 2013