Chevron Pulls Out of Great Australian Bight Progamme

Chevron Australia has pulled out of its Great Australian Bight exploration programme owing to low oil prices, the company said October 12.

“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,” the company said.

It stressed that the decision was commercial and was not a result of concerns about government policy, regulation, the community or the environment.

“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 realise its potential,” Chevron Australia managing director Nigel Hearne said.

BP also withdrew from its Great Australian Bight drilling programme in December last year.

Australian oil and gas industry body, APPEA, said the decision by Chevron is disappointing. “While several other companies continue to develop exploration plans for the Bight, the international environment for the oil and gas industry is challenging,” APPEA’s director for South Australia, Matthew Doman, said October 13.

“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,” he said.

In Australia onshore/offshore oil and gas exploration is at a 30-year low owing to difficult market conditions, escalating regulatory costs and political bans on energy development, he added.

Chevron said it would now focus its attention on its Australian natural gas business. “Offshore Western Australia is a global focus area for Chevron where we have access to vast natural gas resources and existing infrastructure,” 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,” he concluded. 

Nathan Richardson