Resource lobby groups say the Great Australian Bight has plenty of potential and Chevron’s decision to dump its $500 million exploration plans is a reminder that much-needed investment cannot be taken for granted.
Chevron on Thursday said the economics of the expansion did not add up given the oil price. It comes days after it began LNG output at the Wheatstone project in Western Australia.
Chevron has dumped its South Australian exploration plans as it begins LNG production in Western Australia. Photo: AP
“While the Great Australian Bight is one of Australia’s most prospective frontier hydrocarbon regions, in the current low oil price environment it was not able to compete for capital in Chevron’s global portfolio,” Chevron said in a statement.
“This is a commercial decision and was not due to government policy, regulatory, community or environmental concerns.”
Chevron’s exploration blocks were located 300 kilometres west of Port Lincoln. Photo: Chevron
The announcement will see Chevron relinquish more than 32,000 square kilometres of acreage across two deep-water exploration blocks, which it has held since October 2013.
The news is a massive blow for South Australia, which also saw BP reverse its plans to drill in the Bight nearly a year to the day.
and both called Chevron’s move disappointing.
“The international landscape for the petroleum sector is complex with companies having to make difficult commercial decisions,” South Australian Chamber of Mines and Energy chief executive Rebecca Knol said.
“The resource potential of the Bight cannot be overlooked as the economic development benefits for South Australia would be significant.”
The Australian Petroleum Production and Exploration Association said there needed to be more support for offshore exploration.
“Chevron has made it clear its view that the resource potential of the Great Australian Bight remains significant but their decision is a reminder of the much-needed investment in developing Australia’s energy resources cannot be taken for granted,” APPEA’s South Australia director Matthew Doman said.
He added that Chevron’s operations would have helped ease the current energy crisis, reducing Australia’s reliance on imported oil and providing new jobs and investment for South Australia.
Greenpeace and the Greens have welcomed the decision. Greens Senator for South Australia Sarah Hanson-Young said ina tweet that Norwegian Stat Oil should follow Chevron’s example.
Good news!! Chevron has dropped their plan to drill in The Great Aust Bight. Now Norwegian Stat Oil must to go too!
— Sarah Hanson-Young🌈 (@sarahinthesen8) October 12, 2017
The exploration blocks were located approximately 300 kilometres west of Port Lincoln, South Australia.
Chevron was trading at an average of $US117.71 overnight, while brent crude was down 1 per cent at $US56.30 a barrel at the time of publishing.