Energy giant Chevron is abandoning its $400 million exploration plans in South Australia’s Great Australian Bight.
The American company, which acquired two deep-water exploration permits in the Bight in 2013, has blamed low oil prices for the decision.
It is the latest blow for the development of the industry in the region after BP also withdrew from its Great Australian Bight exploration plans this time last year.
The decision has disappointed oil and gas industry bodies, with Australian Petroleum Production and Exploration Association (APPEA) South Australian director Matthew Doman saying Chevron’s move was a reminder that investment in developing Australia’s energy resources could not be taken for granted.
“While several other companies continue to develop exploration plans for the Bight, the international environment for the oil and gas industry is challenging,” Doman said.
“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.”
Chevron acquired the two exploration blocks in October 2013, with acreage spanning more than 32,000 square kilometres.
South Australian Chamber of Mines and Energy (SACOME) Rebecca Knol said the resource potential of the Great Australian Bight could not be overlooked as the economic development benefits for the state would be significant.
“We see no reason why offshore petroleum activities cannot continue safely and sustainably with appropriate regulatory oversight by the National Offshore Petroleum Safety and Environmental Management Authority,” Knol said.
Chevron departs the Great Australian Bight a week after the company expanded its presence offshore Western Australia.
The company last week purchased three exploration interests in the Carnarvon Basin, comprising 50 trillion cubic feet of gas resources over an area of 23,170 square kilometres.
Chevron acquired a 50 per cent interest in the acreage, which it will share with Perth-based partner Woodside Energy.
The American company also announced this week that production had started at the Wheatstone liquefied natural gas (LNG) operation in WA.