Australia’s oil, gas search spending falls in Oct-Dec

Australian oil and gas exploration spending fell in October-December, after recovering to its strongest level since the pandemic in the previous quarter.

Total expenditure for the quarter was at A$258mn ($168mn), down by 20pc compared to the previous quarter, and led by a significant A$61mn reduction in offshore exploration, according to Australian Bureau of Statistics (ABS) data. But total expenditure was up by 21pc on the year. Onshore exploration was largely stable from the previous quarter and rose by 26pc from the same period a year earlier.

Western Australia (WA), Australia's largest gas-producing jurisdiction, spent A$114mn in October-December, a decline of 27pc compared to July-September, but up by 46pc compared to the same period a year earlier.

Australia's largest oil and gas companies, domestic independents Woodside Energy and Santos, last month reported their full-year exploration and evaluation expenses for 2023, with Woodside spending $367mn, down by 12pc from $418mn a year earlier, and Santos reporting it spent $86mn, 42pc down from 2022's $148mn, as both firms progress their sanctioned projects.

The A$90mn difference between onshore and offshore spending widened threefold compared to the A$30mn in the previous quarter. Uncertainty regarding regulatory approvals for offshore works such as seismic testing — which the federal government has promised to address this year — may have contributed to the significant decline in spending.

Much recent exploration has focused on the onshore Perth basin of WA, where Australian independent Strike Energy completed drilling appraisal wells at its South Erregulla field in late 2023.

Fellow domestic independent Beach Energy is nearing completion of the first phase of its Perth basin campaign, the firm said on 12 February, with production testing to occur in January-June at its Trigg Northwest and Tarantula Deep wells. Australia's largest onshore oil producer, Beach, also conducted its Western Flank oil exploration campaign in late 2023, drilling 17 wells in the South Australian Cooper basin.

By Tom Major