Investment

opportunities
in Australian
oil and gas
Why Australia
Australia has a long history of oil and gas production.
The ongoing development of its substantial reserves is
strengthening the country’s position as a leading global
player in the sector. Oil and gas exports are a major
contributor to the Australian economy, earning
A$23.2 billion in 2015.1
Oil remained the largest primary energy source in Australia,
at 38 per cent in 2013–14. Gas is Australia’s third largest
energy resource after oil and coal, accounting for
24 per cent.2 By the end of the decade, Australia should
be home to ten operational LNG projects with a combined
nameplate capacity of 86 million tonnes per annum (mtpa).
This will put Australia on track to become the world’s largest
exporter of LNG by the end of the decade.
Australia’s competitive position is underpinned by a strong
economy, abundant resources, supportive government
policies, mature trade links with key markets, and the
participation of the world’s major oil and gas companies at
all stages of the supply chain.
Australia offers investors:
›› significant oil and gas reserves
›› large pipeline of LNG projects
›› proximity to the rapidly growing Asian energy markets
›› a government committed to developing the oil and
gas sector by reducing red tape and streamlining
environmental approvals
›› a supportive environment for exploration with access to
comprehensive geoscience data
›› opportunities to enter the global supply chains of
multinational oil and gas companies
›› access to world-leading research and development
and innovative oil and gas technologies.

Disclaimer
This report has been prepared as a general overview. It is not intended to provide exhaustive coverage of the topic. The information is made available on the
understanding that the Australian Trade Commission (Austrade) and the Australian Government are not providing professional advice.
While all care has been taken in the preparation of this report, the parties do not accept any responsibility for any losses suffered by persons relying on information
contained in this report or arising from any error or omission in the report. Any reference to companies or investment activities is for illustrative purposes only and
does not constitute an endorsement of those companies or any investment activity.
Copyright © The Australian Trade Commission (Austrade) March 2016. 13-14-674
This report is subject to copyright. All or part of it can be reproduced for bona fide research or public policy with appropriate acknowledgement of the Australian Trade
Commission. Requests and inquiries concerning reproduction should be addressed to Austrade, GPO Box 5301, Sydney NSW 2001 or email [email protected].
Australia’s oil and gas resources

Conventional gas Shale gas production in Australia is an emerging industry.

Australia’s estimated shale gas resource is almost twice the
Australia has substantial conventional gas resources. Australia’s
size of its conventional gas resources.5 Several onshore basins
proved and probable gas reserves stood at 126,000 petajoules,
have significant potential for shale gas and tight gas, which
comprising 83,000 petajoules of conventional gas. Australia
have attracted exploration activities in South Australia, Western
produced 2,460 petajoules of gas in 2014–15, of which 50 per
Australia and the Northern Territory.
cent was exported as liquefied natural gas (LNG).3
Around 92 per cent of Australia’s conventional gas resources Oil resources
are located in the Carnarvon, Browse and Bonaparte basins off
the coast of Western Australia and the Northern Territory. There Australia’s oil resources are primarily condensate and naturally
are also resources in offshore basins along Australia’s southern occurring liquefied petroleum gas (LPG) associated with large
margin as well as in onshore basins. The potential for additional offshore gas fields. Australia also has a number of crude oil
commercial discoveries is large. reserves. There is scope for growth in Australia’s oil reserves
in existing fields, and for new oil discoveries in proven basins
and in underexplored frontier basins. Australia has large
Unconventional gas
unconventional oil resources hosted in oil shales. These
Australia also has significant unconventional gas resources. resources, along with the recently recognised potential for
The economic demonstrated resources (EDR) for coal seam shale gas liquids and light tight oil, could potentially contribute
gas (CSG) has continued rising to an estimated 45,553 to future oil supply. Identified shale oil resources contained in
petajoules at the end of 2014. Large CSG resources exist in immature oil shale deposits is estimated at 131,659 petajoules
the coal basins of Queensland and New South Wales.4 (22,391 MMbbl).6

AUSTRALIA’S GAS RESOURCES AND INFRASTRUCTURE

120° 130° 140° 150°

BONAPARTE BASIN
Gas produced: 1214
Gas remaining: 24 005
0 750 km
BROWSE BASIN DARWIN 10°
Gas produced: 0
Gas remaining: 37 815
ADAVALE BASIN
CARNARVON BASIN Gas produced: 9
Gas produced: 18 315 Gas remaining: 26
Gas remaining: 95 914
BOWEN BASIN
Gas produced: 721
NT Gas remaining: 389
CSG produced: 693
CANNING BASIN CSG remaining: 8330
Gas produced: 0
Gas remaining: 372 QLD SURAT BASIN
Gas produced: 290 20°
Gas remaining: 14
CSG produced: 309
WA CSG remaining: 24 671

AMADEUS BASIN COOPER/

Gas produced: 439 EROMANGA/ BRISBANE
Gas remaining: 311 WARBURTON CLARENCE–
BASINS MORETON BASIN
Gas produced: 6926 Gas remaining: 100
Gas remaining: 1693 CSG remaining: 428
PERTH BASIN GUNNEDAH BASIN
Gas produced: 725 SA
Gas remaining: 267
PERTH Gas produced: 2 30°
NSW Gas remaining: 12
SYDNEY CSG remaining: 1520
ADELAIDE
CANBERRA, ACT GLOUCESTER
VIC BASIN
MELBOURNE CSG produced: 0
Gas resources CSG remaining: 669
Conventional gas OTWAY BASIN
Gas produced: 850 SYDNEY BASIN
resources (PJ) Gas remaining: 1292 CSG produced: 30
CSG remaining: 287
Coal seam gas
resources (PJ) BASS BASIN
Gas produced: 98 TAS HOBART 40°
Past production (PJ) Gas remaining: 736
GIPPSLAND BASIN
Gas produced: 9120
Gas basin Gas remaining: 9253

Gas pipeline LNG processing plant (operating)

Gas pipeline (proposed) LNG processing plant (committed) © Commonwealth of Australia (Geoscience Australia) 2015.
Source: Geoscience Australia and BREE, 2014, Australian Energy
AERA 4.1
Resource Assessment. 2nd Ed. Geoscience Australia, Canberra

1. Australian Bureau of Statistics, Cat. No. 5368.0 International Trade in Goods and Services, Australia, Table 32a. Merchandise Exports, Industry, Jan 2016.
2. Department of Industry and Science, Office of the Chief Economist, Energy in Australia 2015, January 2016, p.6.
3. Australian Energy Regulator, State of Energy Market Report 2015, December 2015, p.88.
4. Department of Industry and Science: Office of the Chief Economist, Energy in Australia 2015, January 2016, p.19.
5. Department of Industry and Science: Office of the Chief Economist, Gas Market Report, November 2014, p.4.
See: www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Pages/Gas-market-report.aspx, accessed 8 March 2016.
6. Carson, L., 2014, Australian Energy Resource Assessment – second edition. 2 ed. Report. Geoscience Australia, Canberra.

Investment opportunities in Australian oil and gas | 3

Liquefied natural gas (LNG)
Australia remained the world’s third largest LNG exporter in 2014
and accounted for 10 per cent of world LNG trade. The strongest
growth in Australia’s export earnings will be in LNG, which is
projected to increase from 23.2 million tonnes in 2013–14 to
about 80 million tonnes in 2019–20. By the end of this decade
Australia is expected to be the world’s largest LNG exporter,
generating estimated export earnings of almost $45 billion
in 2019–20 compared to just over $17 billion in 2014–15.7
Large gas fields in the Carnarvon, Bonaparte and Browse basins
and the vast CSG reserves in Australia’s eastern onshore basins
underpin a growing LNG sector, with project proponents set to
mark several significant milestones.
There are seven liquefaction plants which have either recently
started exporting or are currently under construction, providing Angel gas platform, North West Shelf Project, Western Australia.
a total capacity of 62.3 million tonnes.8 The Queensland Curtis Image courtesy of Woodside Energy Ltd.

LNG Project (QCLNG) started production from its first LNG train
in late 2014, representing the first LNG exports from CSG in the Asian demand for LNG is expected to continue to grow and
world and the first LNG from Australia’s east coast. Three new Australia’s location means it is well placed as a competitive
projects – Australia Pacific LNG, Gladstone and Gorgon – are supplier to these markets. In 2014, around 80 per cent of
scheduled for or have already started first production in 2015–16, Australia’s LNG exports were to Japan. China was Australia’s
and construction of the Wheatstone, Ichthys and Prelude second largest LNG export destination and accounted for
projects off the coast of Western Australia are well advanced. 16 per cent of Australia’s total LNG exports.10 In 2014–15,
20 per cent of Japan’s LNG supply was from Australia, and this
is expected to increase to almost 40 per cent by 2020. Australia
AUSTRALIAN LIQUEFACTION CAPACITY is also expected to supply almost 40 per cent of China’s LNG
Nameplate capacity and 25 per cent of South Korea’s LNG by the same date.11
mtpa mtpa
■ North West Shelf train 1–5*
■ Darwin LNG train 1*

SHELL PRELUDE FLNG

■ Pluto LNG train 1*
80 80
■ QCLNG train 1–2* (unconventional)
■ APLNG train 1–2* (unconventional)
■ GLNG train 1–2* (unconventional)
Longer than four soccer fields and displacing six times
60 60 as much water as the largest aircraft carrier, Shell’s Prelude
■ Gorgon LNG train 1–3
■ Wheatstone LNG train 1–2
Floating Liquefied Natural Gas (FLNG) facility will be the
■ Ichthys LNG train 1–2 biggest floating production facility in the world.
40 40
■ Prelude LNG (floating)
When completed, the facility will be 488 metres long
and 74 metres wide, and when fully loaded will weigh
20 20
around 600,000 tonnes. It will be towed to its location
in the Browse Basin, off the northwest coast of Western
0 0 Australia, to extract and process gas from the Prelude
1990 1995 2000 2005 2010 2015 2020
and Concerto gas fields. Onshore support services for the
*indicates projects currently producing LNG; only train 1 of QCLNG is in production facility will be spread between Broome, Darwin and Perth,
and Perth will be established as a centre for operational
Source: Reserve Bank Bulletin, March 2015.
excellence in FLNG.
The Prelude FLNG facility is expected to stay moored at
Australia is a reliable LNG producer offering investors a stable
location for 25 years, and to produce at least 3.6 million
regulatory environment and proximity to the expanding Asian LNG
tonnes of LNG per year as well as liquefied petroleum gas
market. Gas is a relatively flexible and clean fuel and is projected to
and condensate for export.
be the fastest growing non-renewable energy source over the next
twenty years.9

7. Department of Industry and Science: Office of the Chief Economist, Gas Market Report 2015, March 2016, p.19.
8. Department of Industry and Science: Office of the Chief Economist, Gas Market Report 2015, March 2016, p.79.
9. Geoscience Australia, Australian Energy Resource Assessment – second edition, 2014.
10. Department of Industry and Science: Office of the Chief Economist, Energy in Australia 2015, January 2016, p.87.
11. Department of Industry and Science: Office of the Chief Economist, Gas Market Report 2015, March 2016, p.117.

4 | Investment opportunities in Australian oil and gas

AUSTRALIAN LNG EXPORTS BY MARKET, 2014 PROJECTED LNG EXPORTS BY MARKET, 2020

South
Korea South
0.9 Mt Korea
13 Mt
China
China Japan Japan
18 Mt
3.8 Mt 18.4 Mt 37 Mt
India
2 Mt
Chinese
Chinese Taipei
Taipei
0.1 Mt
3 Mt Others
ASEAN 1 Mt
3 Mt

Others
0.1 Mt

Australia Australia
23.2 Mt 77 Mt

Source: Department of Industry and Science: Office of the Chief Economist, Source: Department of Industry and Science, Resources and Energy Quarterly,
Energy in Australia 2015, January 2016, Map 7.2. March 2015.

AUSTRALIA’S LNG PROJECTS, EXISTING AND UNDER CONSTRUCTION

Commence Project Capacity
production name Company (Mt)
Existing

1989 North West Shelf (WA) Woodside, BHP Billiton, BP, Chevron, Shell, MIMI 16.3

2006 Darwin LNG (NT) Conoco Philips, INPEX, Eni, Santos, TEPCO, Tokyo Gas 3.7

2012 Pluto LNG (WA) Woodside, Tokyo Gas, Kansai Electric 4.3

2014 Queensland Curtis LNG (QLD) BG Group, CNOOC 8.5

2015 Gladstone LNG (QLD) Santos, Total, Petronas, KOGAS 7.8

2015 Australia Pacific LNG (QLD) Origin Energy, ConocoPhillips, Sinopec 9

Estimated
Under construction capacity (Mt)

2016 Gorgon LNG (WA) Chevron, Shell, ExxonMobil 15.6

2016 Wheatstone (WA) Chevron, Apache, KUFPEC, Shell, 8.9

Kyushu Electric Power Company, PE Wheatstone

2017 Prelude (WA) Shell, INPEX, KOGAS, CPC 3.6

2017 Ichthys (NT) INPEX, Total 8.4

Source: APPEA website, available at: http://www.appea.com.au/oil-gas-explained/operation/australian-lng-projects/.

Investment opportunities in Australian oil and gas | 5

Improving industry Offshore petroleum exploration and development is regulated
by a title system. Petroleum activities can occur only if a

competitiveness company holds a valid title, which provides holders with an

exclusive right to apply for further approvals to conduct safe
petroleum operations in the area.
The Australian oil and gas industry is no longer seen as a high-
cost jurisdiction and is becoming increasingly cost-competitive. The issuing of new exploration permits is facilitated through
A lower Australian dollar, reduction in raw material costs and the Offshore Petroleum Exploration Acreage Release. Every
an easing in salary levels are combining to significantly reduce year, the Australian Government releases a number of vacant
project costs in the Australian oil and gas industry. offshore petroleum areas for which companies can bid for
exploration permits (usually within a six- or 12-month timeframe).
In addition, the Australian Government has been working with
industry on a range of measures to ensure Australian oil and The 2015 Acreage Release comprises 29 areas located across
gas projects are cost-competitive and to secure the next wave eight basins in the offshore areas of the Northern Territory, the
of investment in Australia’s LNG sector. In 2014, Australia’s Territory of Ashmore and Cartier Islands, Western Australia,
Minister for the Environment announced a new streamlined South Australia, Victoria and Tasmania. Twenty-three areas
approach for offshore petroleum and greenhouse gas activity are available for work program bidding and six areas for cash
environmental approvals. The approach will lead to savings for bidding. All release areas are supported by pre-competitive
industry worth an estimated A$120 million per year. geological and geophysical data and analysis
(see petroleum-acreage.gov.au for more information).
The National Offshore Petroleum Safety and Environmental
Management Authority (NOPSEMA) is now the sole assessor
for offshore petroleum and greenhouse gas activities in AUSTRALIA’S UNCONVENTIONAL
Australian waters. This one-stop shop approvals process
removes unnecessary duplication between two sets of laws,
GAS POTENTIAL
which had discouraged investment by adding layers of red tape
for businesses trying to develop offshore projects.

Oil and gas exploration

opportunities
Australia has significant potential for world-class oil and gas
discoveries. The country offers a stable petroleum regulatory
regime with security of tenure and is focused on enhancing
pre-competitive data acquisition programs to stimulate
exploration activity.
Major new offshore discoveries continue to be made in the
North West Shelf, the Carnarvon Basin and the Browse Basin,
which may soon become Australia’s newest gas-producing
province. In the Otway Basin, along Australia’s southern margin,
a new commercial gas discovery was made at the Speculant-1
© Commonwealth of Australia (Geoscience Australia) 2014.
exploration well.
Onshore exploration for shale oil and gas has increased. In the
Cooper Basin, Australia’s main onshore hydrocarbon province,
the existence of large volumes of basin-centred gas in the LANDBRIDGE GROUP
Roseneath-Epsilon-Murteree (REM) formations has been In November 2014, China’s Landbridge Group, a privately
demonstrated. Drilling campaigns are also being carried out in owned company based in Shandong Province, invested
the Georgina Basin in the Northern Territory, and in the Canning A$200 million in Australia’s oil and gas sector through
and Perth basins in Western Australia, which continue to offer its acquisition of Brisbane-based WestSide Corporation.
wide-ranging exploration opportunities. The proposed North This strategic acquisition provides Landbridge Group with
East Gas Interconnector is currently being progressed to link the significant reserves and exploration interests in Queensland.
Northern Territory’s significant gas resources to eastern states.12

12. Northern Territory Government, Department of the Chief Minister website. See: http://dcm.nt.gov.au/territory_economy/north_east_gas_interconnector, accessed 8
March 2016.

6 | Investment opportunities in Australian oil and gas

Comprehensive geoscience data
Australia’s federal, state and territory governments have ENERSIGHT CORPORATION
developed major geoscience programs to provide explorers with In 2013, Canadian oil and gas software provider Enersight
open access to precompetitive information and datasets. Corporation (enersight.com) opened an office in Brisbane,
Geophysical information, including regional gravity, deep seismic its first outside North America. The Canadian company
and high-resolution airborne magnetic data, is supplemented with expanded into Australia after attracting a second Australian
geological maps, GIS datasets, and various reports and charts. client that converts CSG to LNG. The company says adding
a second CSG-to-LNG client has made it the dominant
The Australian Government, through Geoscience Australia player in Australia’s unconventional field development
(ga.gov.au), also provides access, which is typically free, to large planning market.
volumes of data and reports submitted by industry under the
Offshore Petroleum and Greenhouse Gas Storage Act 2006. ‘In addition to its large coal seam gas projects, Australia has
This reporting is done as part of the industry’s work program a burgeoning unconventional industry for shale gas and
commitments. This data assists industry to make informed oil,’ says Don Merritt, Vice President for Enersight Australia.
investment decisions in relation to exploration programs ‘Being the dominant player in the North American shale gas
and provides relevant geological information to companies planning market, we are very excited by the potential for
considering participating in oil and gas exploration in Australia. growth of Enersight in Australia.’

A national geoscience portal (geoscience.gov.au) provides an

entry point to fundamental geoscience data and information.
The site allows investors and explorers to access geoscience
information at a national level and refines searches down to the
Innovative R&D
regional and local level via pathways to the relevant state and Australia’s oil and gas industry has a reputation worldwide for
territory datasets. overcoming challenges related to the remote location
of its resources, inherent technical challenges and risks,
and mounting environmental and social pressures.
Supply chain opportunities These difficulties have driven a unique culture of innovation
that has been the hallmark of Australia’s oil and gas industry.
The large concentration of multinational oil and gas companies Oil and gas R&D scientists in Australia focus on exploration,
with expanding operations in Australia provides investors and development, production, processing and transport, and
international firms with significant opportunities to enter their sustainability.
supply chains. Many are undertaking projects that will require
Australian oil and gas companies are pioneering innovations
operational support and maintenance services.
in floating LNG, major developments in CSG, advanced
Firms offering innovative technologies and services will be in subsea geotechnics in extreme marine environments and
demand in Australia given the focus on increasing productivity implementing large-scale geosequestration projects. Australian
and efficiency at time of weak commodity prices. For oil and companies are also recognised as leaders in innovation around
gas service providers, Australia also provides a regional base to safety, remote operations and environmental controls.
pursue work in the Asia Pacific region.
Investors can collaborate and share in research outcomes
There are various services available to help companies identify with world-class institutions, including the national science
and secure work in the oil and gas sector. These include: agency, the Commonwealth Scientific and Industrial Research
›› Project Connect: an online service that lists project Organisation (CSIRO), Cooperative Research Centres, Centres
opportunities and connects Australian businesses with of Excellence and universities.
industry suppliers
›› Achilles Supply Base: a vendor pre-qualification and
supplier management system for the oil and gas sector
›› Industry Capability Network: an independent networking
organisation that connects local suppliers and service
providers to meet the requirements of local projects.
Investors can also learn from the experience of global companies
operating in Australia. Global companies with oil and gas
operations in Australia include Chevron, ConocoPhillips,
ExxonMobil, PetroChina and Shell. Engineering, procurement and
construction management, and tier-one firms such as Bechtel,
Halliburton, Mitsubishi, Schlumberger and Technip also have
businesses in Australia.

13. http://www.austrade.gov.au/International/Invest/Investor-Updates/2013/Canada-s-Enersight-expands-to-Australia, accessed 8 March 2016.

Investment opportunities in Australian oil and gas | 7

How Austrade
can help
The Australian Trade Commission – Austrade –
contributes to Australia’s economic prosperity by
helping Australian businesses, education institutions,
tourism operators, governments and citizens as they:
›› develop international markets
›› win productive foreign direct investment
›› promote international education
›› strengthen Australia’s tourism industry
›› seek consular and passport services.
What we provide
Working in partnership with Australian state and
territory governments, Austrade provides international
investors with the information needed to establish or
expand a business in Australia.
Services for international investors include:
›› initial coordination of investment enquiries and
assistance
›› information on the Australian business and
regulatory environment
›› market intelligence and investment opportunities
›› identifying suitable investment locations and
partners in Australia
›› advice on Australian government programs and
approval processes.

Accessing Austrade’s investment services

Austrade’s investment services are free of charge and
are focused on productive foreign direct investment
outcomes of strategic importance to the Australian
economy, to build capability and enhance productivity.
Austrade does not assist with real estate and portfolio
investments, sales or representation offices, straight
acquisitions, hostile takeovers or investments by
individuals.

W: austrade.gov.au/invest
E: [email protected]