Understanding Australia's petroleum resources, future production trends and the role of the frontiers

Abstract

Relative to its needs over the last 30 years, Australia has enjoyed a high level of self-sufficiency. Whilst the overall remaining reserves of oil have remained relatively constant, reserves of condensate have grown substantially as major reserves of natural gas have been added to Australia's resource inventory. Oil and condensate reserves stand at 3.43 billion barrels (505 GL) of which 50% is condensate in gas fields. Australia's undiscovered oil potential in its major offshore hydrocarbon producing basins has been upgraded to an indicative 4.975 billion barrels (790 GL) at the average expectation, following evaluation of the assessment results for Australia in the authoritative worldwide assessment of undiscovered potential by the US Geological Survey. Current reserves, however, are insufficient to sustain present levels of production in the medium term. Estimates of future production of oil and condensate suggest that at the mean expectation, production rates will drop by around 33% by 2005 and 50% by 2010, largely as a result of a decline in oil production. This forecast includes production from fields that have not yet been discovered. Condensate production will continue to grow, but rate of growth is constrained by gas production rates and overall by the development timetable for the major gas fields. The rate of discovery of new oil fields is insufficient to replace the reserves that are being produced. If Australia is to maximize the opportunity to maintain production at similar levels to the recent past, it is probable that exploration effort will have to diversify to the frontier basins to locate a new oil province whilst continuing to explore the full potential of the known hydrocarbon-bearing basins. Australia still has a remarkable number of basins that have received little or no exploration. Whilst there is no substitute for a discovery to stimulate exploration in poorly known areas, demonstrating that petroleum has been generated and migrated is the key to attracting continued exploration interest.