Chevron gives up on Great Australian Bight exploration

Chevron Australia has made a decision to discontinue the company’s Great Australian Bight exploration program.

The company said on Thursday that, while the Great Australian Bight is one of Australia’s most prospective frontier hydrocarbon regions, it was not able to compete in the current low oil price environment.

Chevron Australia managing director Nigel Hearne said: “We appreciate the strong support from governments, regulators and the local community for our plans to explore for hydrocarbons offshore South Australia. We are confident the Great Australian Bight can be developed safely and responsibly, and we will work closely with the interested stakeholders to help realize its potential.”

The company pointed out that this was a commercial decision and was not due to government policy, regulatory, community or environmental concerns.

It is worth mentioning that the oil major was accused by the Green Party back in February of donating “tens of thousands of dollars” to the Liberal and Labor parties in Australia to “buy influence” and get support for its drilling plans offshore Australia.

“We have invested billions of dollars in Western Australia to commercialize 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,” added Hearne on Thursday.

Chevron is the second oil major to give up on the Great Australian Bight after BP withdrew its environment plan submissions in December 2016 for an exploration drilling program that proposed drilling of the Stromlo-1 and Whinham-1 wells.

Energy investment can’t be taken for granted

In a statement on Friday, the Australian Petroleum Production & Exploration Association (APPEA) said that Chevron’s decision to discontinue its Great Australian Bight exploration program was disappointing for the wider Australian community who need new local energy supply, and for South Australians who would have benefitted from the activity.

APPEA’s Director South Australia Matthew Doman said success in the Bight would ease Australia’s reliance on imported oil and deliver the state much-needed new investment and jobs.

“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.

“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,” said Doman.