Leslie Massey
Australia's petroleum industry is largely dependent on imports, with about 83% of the country's fuel sourced from other countries. Western Australia is the leading oil-producing state, contributing to most of the country's petroleum exports. The petroleum industry in Western Australia is characterised by the involvement of private corporations, with the federal and state governments playing a regulatory role. The country's oil production is concentrated in the Bonaparte, Browse, Carnarvon and Gippsland basins, with the Carnarvon basin in Western Australia accounting for 70% of crude and condensate production.
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What You'll Learn
Western Australia's petroleum production
Western Australia is Australia's leading oil and condensate-producing state, accounting for 70-71% of the nation's crude oil and condensate production. The petroleum industry in Western Australia is the largest contributor to Australia's petroleum exports. The industry is characterised by the involvement of private corporations, with the federal and state governments playing an important regulatory role.
The North West Shelf (NWS) is the primary location for Western Australia's petroleum production. Oil exports are shipped from Port Hedland. The industry extracts crude oil, condensate, and natural gas from petroleum reservoirs deep beneath the Earth's surface. A large plant located at Withnell Bay near Dampier produces liquefied natural gas (LNG) for export to Asian customers. Crude oil and most petroleum liquids are exported. LNG is the state's highest-value petroleum product.
Western Australia's petroleum sector includes crude oil, condensate, liquefied natural gas (LNG), natural gas, and liquefied petroleum gas (LPG). In 2016-17, the value of petroleum products produced in state areas (onshore and offshore) and in adjacent Commonwealth offshore areas was $19.1 billion. In 2007, the industry produced 126 million barrels of crude oil/condensate and 30 billion cubic metres of gas. Approximately 65% of the gas was transformed into 12 million tonnes of LNG, all of which was exported, with the remainder sold to users in Western Australia. Primary production by the industry was valued at $16.7 billion, accounting for 31% of all natural resources produced in the state.
Most of Western Australia's petroleum production occurs at offshore production platforms, although many wells are situated on the mainland and on several islands off the coast, such as Thevenard Island and Barrow Island, where commercial oil production began in 1964. WA's largest production platforms are North Rankin A and Goodwyn A, both operated by Woodside Energy, located approximately 130 km west of Dampier. There are currently four major natural gas transmission pipelines supplying the Western Australian gas market: the Dampier to Bunbury Natural Gas Pipeline (DBNGP), the Goldfields Gas Pipeline (GGP), the Parmelia Pipeline, and another pipeline taking gas from various fields in the Perth Basin.
Five of the seven major sedimentary basins in Western Australia have known hydrocarbon accumulations, with 2007–08 production coming from the Carnarvon, Perth, Bonaparte, and Canning basins. Sixty-one fields were in production during the 2007–08 fiscal year. Petroleum in Western Australia is mostly sourced from the Carnarvon Basin, which stretches for 1,000 km along the west and northwest coast, from Geraldton to north of Port Hedland. The onshore part of the Carnarvon Basin covers about 115,000 km2, while the offshore part covers approximately 535,000 km2, with water depths up to 3,500 m. The Carnarvon basin is home to the North West Shelf Venture's LNG project, which has an export capacity of 16.3 million tonnes per year. The basin also hosts several oil fields, including Vincent, Pyrenees, Okha, and Mutineer-Exeter. Oil production from the Carnarvon Basin accounts for around 60% of Australia's total oil production.
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Victoria's petroleum production
Victoria was the site of Australia's first oil discovery in 1924, near Lakes Entrance. The Gippsland Basin, located in south-eastern Victoria, is the state's most productive petroleum province. Exploration in the Gippsland Basin since the 1960s has yielded several world-class oil and gas fields, as well as numerous small and medium-sized fields. The basin covers an area of 46,000 km2, with two-thirds of it located offshore. It is estimated to contain reserves of 2.7 trillion cubic feet of natural gas and ethane, as well as 220 million barrels of oil and condensate. All commercial petroleum discoveries in the Gippsland Basin have been found offshore.
The Otway Basin is another ancient geological depocentre in Victoria, formed during the Late Jurassic to Early Cretaceous period. It covers approximately 155,000 km2, with about 80% located offshore. Exploration in the Otway Basin since the late 1970s has resulted in numerous onshore and offshore gas discoveries. Within the Victorian portion of the basin, all commercially viable gas discoveries have been found offshore and onshore around the Peterborough–Port Campbell region. Natural gas from the Otway Basin services Melbourne, regional centres across Victoria, and the wider east-coast gas market.
Victoria currently has a permanent ban on hydraulic fracturing and had a moratorium on onshore petroleum exploration and production until 30 June 2021. As of 2019, Australia's oil production was estimated at 754 PJ (131 million barrels). Most of Australia's oil is produced on the North West Shelf, and it is more cost-effective to import refined fuel products from larger refineries in Asia. Australia exported a small volume of refined products and LPG (about 118 PJ) in 2018–19, but this represented a small proportion of domestically refined products.
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Australia's petroleum imports
Australia has been a net importer of refined oil products, crude oil, and refinery feedstocks since the mid-1980s. The country imports almost all of its oil, with 51-53% of refined petrol imports coming from Singapore's refineries, 18% from South Korea, 12% from Japan, and the rest from various other countries. Australia's fuel supply routes are vulnerable to geopolitical tensions, particularly in the South China Sea, and the country could face serious consequences in the event of disruptions to its imports.
The country's oil production is dominated by international companies, including US-based Apache, ConocoPhillips, Chevron, and ExxonMobil, and European-based BP and Shell. Most onshore and offshore production licenses are held by multiple parties in joint ventures, such as the North West Shelf Venture, which includes BHP, BP, Chevron, Shell, Woodside Petroleum, and a joint venture between Mitsubishi and Mitsui & Co.
While Australia has some oil reserves, over 80% of its gas reserves and over 95% of its oil reserves are offshore, concentrated in the Bonaparte, Browse, Carnarvon, and Gippsland basins. The oil produced in eastern Australian basins is mainly consumed domestically, but falling production on the east coast has increased the reliance on imported feedstock.
The retail downstream business in Australia is dominated by Ampol, which had 1,900 stores across the country as of October 2022, including 540 stations co-branded and operated by EG Australia. The Australian government has implemented measures to manage fuel supplies, with Victoria and Western Australia passing their own price control legislations in 2000 after the federal government discontinued fuel price regulation in 1998.
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Australia's petroleum exports
Australia has been importing most of its petroleum consumption since the mid-1980s. However, between 1865 and 1952, a small proportion of petroleum was produced locally from oil shale by various companies. The country's first oil rig was erected in the Coorong in 1866, following the discovery of deposits of coorangite, an organic-rich sediment that was mistaken for oil seepages.
The first oil discovery in Australia was made near Lakes Entrance, Victoria, in 1924. In November 1953, the West Australian Petroleum Pty Ltd (WAPET) joint venture discovered Australia's first flowing oil at Rough Range on the North West Cape. WAPET also discovered the country's first commercial natural gas field in Western Australia in 1964.
Over 80% of Australia's gas reserves and over 95% of its oil reserves are offshore, with reserves concentrated in the Bonaparte, Browse, Carnarvon, and Gippsland basins. The country's oil production in 2019 is estimated to have totalled 754 PJ (131 million barrels). Australia exported a small volume of about 118 PJ of refined products and liquefied petroleum gas (LPG) in 2018-2019, which accounted for a small proportion of domestically refined products. Export earnings from these exports increased by about 17% in 2018-2019 to AUD$3.6 billion.
The retail downstream business in Australia is dominated by Ampol, which has 1,900 stores across the country as of October 2022, including 540 stations co-branded and operated by EG Australia. The upstream activities in the petroleum sector include exploration, appraisal, development, construction, and production, and this sector is dominated by international companies, including Apache, BHP, Chevron, ConocoPhillips, ExxonMobil, Santos, Shell, and Woodside.
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Australian petroleum retail
Australia's petroleum industry is dominated by international companies, including Apache, BHP, Chevron, ConocoPhillips, ExxonMobil, Santos, Shell, and Woodside. The country's first oil discovery was made near Lakes Entrance, Victoria, in 1924, and its first oil rig was erected in 1866. However, most of the petroleum consumed in Australia is imported, with the country relying on other nations for about 83% of its fuel supply. Australia's Energy Minister, Josh Frydenberg, has attributed this growing reliance on imported fuel to the closure of domestic refineries and a decline in domestic oil production.
Western Australia is the country's leading oil-producing state, accounting for 71% of Australia's crude oil and condensate production. The Carnarvon Basin in Western Australia is a significant source, contributing about 70% of the country's crude and condensate production. The petroleum industry in Western Australia is the largest contributor to Australia's petroleum exports, with the North West Shelf being the primary production site. Oil exports from Western Australia are shipped from Port Hedland to Asian customers.
The retail downstream business in Australia is dominated by Ampol, which operates 1,900 stores across the country, including 540 stations co-branded and operated by EG Australia. Ampol was founded by Sir William Gaston Walkley in 1936 as the Australian Motorists Petrol Company Limited to address concerns about inequitable petrol pricing and allegations of transfer pricing by foreign oil companies.
The Australian government has recognised the importance of securing national fuel supplies and has proposed a Fuel Security review to address these challenges. The country's fuel reserves have been declining, falling short of the three-month standard for fuel reserves. Australia's ratification of the Kyoto Protocol treaty in 2008 has also shifted the focus towards increasing the use of natural gas to reduce carbon dioxide emissions from petroleum-based fuels.
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Frequently asked questions
Most of Australia's petroleum production occurs offshore, with over 80% of gas reserves and over 95% of oil reserves located in the Bonaparte, Browse, Carnarvon and Gippsland basins.
The petroleum industry in Western Australia is the largest contributor to Australia's petroleum exports. Woodside Energy, Santos, and Chevron are some of the companies involved in the production of petroleum in Australia.
Australia exports crude oil and petroleum liquids to Asian countries like Indonesia, Singapore, China, Thailand, and Malaysia.
Australia has less than 50 days' worth of fuel stocks as of January 2018, falling short of the three-month standard for fuel reserves.
Australia's ratification of the Kyoto Protocol treaty in 2008 is expected to increase the use of natural gas to reduce carbon dioxide emissions. However, with declining domestic oil production and increasing reliance on fuel imports, the industry faces challenges in securing national fuel supplies.
