Australia Needs to Boost `Frontier’ Oil Exploration, Group Says

Australia’s oil explorers need to widen their search for discoveries in so-called frontier areas to avoid a A$28 billion ($26 billion) petroleum trade deficit within a decade, the nation’s oil and gas industry group said.

Australia has 50 sedimentary basins, of which just 12 are producing oil and gas, pointing to potential for drilling in little-explored areas, said Belinda Robinson, chief executive officer of the Australian Petroleum Production and Exploration Association. Four basins have been deemed non-commercial.
Crude-oil production in Australia dropped about 3 percent last year to 120 million barrels, contributing to a A$13.7 billion petroleum trade deficit, up from A$900 million in 2000, according to the industry group. Spending on exploration jumped 57 percent last year to a record A$2.66 billion even as the number of wells drilled fell as equipment and labor shortages drove up costs.

“The costs of exploration have gone through the roof,” Robinson said April 4 in a teleconference with reporters. Her remarks were embargoed until today, the eve of the start of the association’s annual conference in Perth, Western Australia. “The challenge is for Australia to persuade potential investors to risk money here rather than elsewhere in the world.”

In the absence of finding a “major new oil province,” Australia will be importing 80 percent of its requirements for oil and refined products by 2015, up from about 20 percent in the 1990s, Resources and Energy Minister Martin Ferguson said in February.

Bloomberg