Chevron said it would concentrate on developing its WA offshore assets.
BY CAMERON DRUMMOND
A MONTH after BP announced it would not proceed with exploration drilling in the Great Australian Bight, Global energy giant Chevron has followed suit.
Chevron said that while it believed the Bight was one of Australia’s most prospective hydrocarbon regions, it was not able to compete for funding against the rest of its global portfolio due to current low oil prices.
Chevron said the decision was purely commercial, and not due to Government policy, regulatory, community or environmental concerns.
“We appreciate the strong support from governments, regulators and the local community for our plans to explore for hydrocarbons offshore South Australia,” Chevron Australia managing director Nigel Hearne said.
“We are confident the Great Australian Bight can be developed safely and responsibly and we will work closely with the interested stakeholders to help realise its potential.”
APPEA South Australia director Matthew Doman said Chevron’s decision was disappointing for the wider Australian community who need new local energy supply, and for South Australians who would have benefitted from the activity.
“Chevron has made clear its view that the resource potential of the Great Australian Bight remains significant but their decision is a reminder that much-needed investment in developing Australia’s energy resources cannot be taken for granted,” Mr Doman said.
“While several other companies continue to develop exploration plans for the Bight, the international environment for the oil and gas industry is challenging.
“With the oil price halving over the last three years, exploration activity around the world is at very low levels. Global exploration spending is expected to fall this year for the third year in a row to less than half 2014 levels.
“In Australia, onshore and offshore oil and gas exploration is at 30-year lows – due to difficult market conditions, escalating regulatory costs and political bans on energy development.”
While it may have exited the underexplored region for the time being, Chevron said it remained committed to developing its WA assets, recently acquiring three new exploration blocks covering 23,170sqkm in the North Carnarvon Basin.
The blocks, A-528-P, WA-529-P and WA-530-P, would be operated by Chevron in a 50:50 JV with Woodside Energy.
Mr Hearne said partnership was going to be “crucial” for ongoing investment in WA’s resources sector to maximise the value of available resources.
“Offshore WA is a global focus area for Chevron and these new exploration blocks add to our already significant gas position,” Mr Hearne said.
“We have invested billions of dollars in Western Australia to commercialise our large gas resource base through the Chevron-operated Gorgon and Wheatstone LNG and domestic gas facilities and expect to be here for decades to come.
“Through greater collaboration with other producers in WA, Chevron is also pursuing opportunities to accelerate the commercialisation of our gas resource base through non-operated LNG facilities,” Mr Hearne said.