Production and development across Australia 2016

Abstract

In 2016, sustained depressed and volatile oil prices led companies to continue cost reduction strategies. Proposed developments have seen delays and reductions in scope as a result. Australian oil production declined by around 10%. However, new and continued liquefied natural gas (LNG) production bolstered both Australian and global gas supply. Australia was the strongest contributor to global LNG growth in 2016, showing the biggest year-on-year increase. In the first half of 2016, 20% of global LNG came from Australia, second only to Qatar with 29% of the market share. Australia remains on track to become the world’s largest LNG producer in the next 3–5 years. 2016 saw the start-up of Gorgon LNG in March, the first of Chevron’s two North West Shelf LNG projects and the third of several producing, developing and proposed LNG projects within the North Carnarvon Basin – already Australia’s most prolific producing basin. On the east coast, development of the coalbed methane (CBM) to LNG projects continued with an additional train brought onstream at each of the Origin/ConocoPhillips-operated APLNG Project and Santos’ GLNG Project. This further increased production in the Bowen–Surat Basins and drove discussions around the ability of east coast gas to meet both the demands of the LNG projects and ensure continued domestic gas reliability. Additional gas may be required for both, opening opportunities for production from other basins. Gas production continues to drive the Australian industry, with substantial inputs from LNG and unconventional operations. The next phase, in all sectors, will be key to Australia’s future in the global energy market. Will it be able to overcome the expected challenges of global oversupply, continued price volatility and domestic reliability concerns to fulfil its potential?