Australia Oil and Gas Upstream Industry

Australia Oil and Gas Upstream Market Analysis

The Australia Oil and Gas Upstream Market is expected to register a CAGR of greater than 2% during the forecast period.

• The offshore segment is expected to dominate the market during the forecast period.
• Australia has about 2.4 thousand million barrels of total proven oil reserves, which can be exploited in the future for commercial production. This factor is likely to present opportunities for the players in the Australian oil and gas upstream market.
• The country's shift toward renewable energy sources is likely to restrain the market during the forecast period.

Australia Oil and Gas Upstream Market Trends

Offshore Segment to Dominate the Market

• Australia derives most of its oil and gas production from offshore fields. The offshore reserves contribute a significant share of oil and gas resources to the Australian economy, accounting for over 85% of petroleum production in 2020.
• Petroleum production in the country has been declining over the years, mainly because of the country's shifting focus toward natural gas. As of 2020, Australia was the second-largest exporter of petroleum after Qatar.
• With healthy support from the government, offshore exploration and production activities in Australia are expected to witness a significant increase during the forecast period. In August 2021, Australia's parliament passed the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2021 to strengthen the country's offshore oil and gas regulatory framework.
• In March 2021, Beach Energy made a gas discovery at the Artisan 1 exploration well, located about 30 km offshore Victorian Otway Basin, Australia. The well encountered a gross gas column of 69.5 m in the Upper Waarre Formation with a net gas pay of 62.9 m.
• In July 2021, Western Gas announced its plans to start drilling work at the Sasanof-1 exploration well offshore Western Australia in early 2022. The Sasanof Prospect estimated resources of 24 trillion cubic feet (Tcf) of gas and 1.1 billion bbls of condensate, which may bolster the country's production capabilities.
• Due to the factors mentioned above, the offshore segment is expected to dominate the Australian oil and gas upstream market during the forecast period.

Shift Toward Renewable Energy Sources Likely to Restrain the Market

• Over the past decade, renewable energy usage in Australia increased much faster than non-renewable fossil fuel sources. The most widely deployed renewable energy source in Australia are solar and wind power sources, contributing to more than 90% of the renewable energy in 2020.
• In 2020, the renewable energy source witnessed an average growth of 21%, with 49.9 Terawatt-hours (TWh) of total power generation compared to 41.2 TWh in 2019. Solar generated about 23.84 TWh, followed by wind generating 22.6 TWh and 3.41 TWh by other renewable sources such as hydropower and bioenergy.
• In 2020, Australia's total installed solar capacity was 17,625 MW compared to 13,564 MW in 2019, witnessing a significant growth rate of 30%. The total installed wind capacity in 2020 was 9,457 MW compared to 7,133 MW in 2019. The growing concerns about the environmental impacts of the usage of fossil fuels have driven the rapid growth of the renewable energy market, which may continue during the forecast period.
• Additionally, renewable energy projects benefit from government schemes and incentives such as feed-in-tariff (FiT) and net-metering schemes. Due to these factors, despite the relatively higher cost, renewable energy prices are competitive with the price of electricity generated from natural gas.
• In March 2022, Acciona secured environmental approval for its 923 MW Maclntyre wind project in Queensland, Australia. The construction is expected to begin in the second quarter of 2022 and finish by 2024.
• Thus, the increasing renewable energy adoption in Australia is likely to restrain the Australian oil and gas upstream market during the forecast period.

Australia Oil and Gas Upstream Industry Overview

The Australian oil and gas upstream market is moderately consolidated. Some of the major players in the market include Shell PLC, Chevron Corporation, BP PLC, ExxonMobil Corporation, and Woodside Petroleum Ltd.

Australia Oil and Gas Upstream Market Leaders

Australia Oil and Gas Upstream Market News

• In September 2021, a partnership between Wood and National Energy Resources Australia (NERA) developed an advanced AI technology known as Augmented Machine Vision Solution (AMVS). This technology is expected to assist in inspecting industrial equipment, especially subsea oil and gas infrastructure. This new innovative solution improves speed and accuracy and reduces human risk. It also has the potential to be executed in various industries to enhance reliability and reduce inspection costs.
• In August 2021, Chevron, a multinational energy corporation, awarded a contract to Worley, an engineering and construction management services company, on the offshore project in Western Australia, Jansz-lo Compression (J-IC). The project, worth USD 6 billion, will likely implement advanced subsea compression technology to supply natural gas from the Jansz-lo field to domestic gas plants and three LNG trains on Barrow Island. The contract includes design, engineering, and construction management services for the project's communications and power transmission components.