p r o d u c e d w i t h t h e a s s i s t a n c e o f
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World supply of oil and LNG
World oil supply averaged 88.7 million barrels a day in 2014, an increase of 2.1 million barrels a day (2.3%) from 2013. Share of world oil supply 2014OPEC 41.0%
USA 12.3% Other North America 8.2%
SOURCE: BP STATISTICAL REVIEW OF WORLD ENERGY 2015
Russian Federation 12.7%
Europe 7.1%
China 5.0% Asia–Pacific 4.4% Middle East & Africa (non-OPEC) 0.0%
South & Central America 9.3%
Top 10 LNG exporting countries 2014 (billion cubic metres)
0 20 40 60 80 100 120
SOURCE: BP STATISTICAL REVIEW OF WORLD ENERGY 2015
Qatar Malaysia
Australia
Nigeria Indonesia Trinidad & Tobago Algeria Russian Federation Oman Yemen
Energy use in Australia
Oil remained Australia’s largest primary energy source in 2013–14, followed by coal (32%) and natural gas (24%). Renewables accounted for 6 per cent of Australia’s energy mix in 2013–14. Share of primary energy consumption 2013–14
Oil 38% Coal 32% Renewables 6%
SOURCE: ENERGY IN AUSTRALIA 2015
Gas 24%
The global energy market continues to adjust to the additional supplies coming on line over recent years, coupled with less robust global demand growth. Global supply has increased at a greater pace than global demand, causing a commodity price correction — a fall in the price of oil.
The price of oil (US$ per barrel)
0 30 60 90 120 150 1999
WTI spot price FOB
2002 2004 2006 2008 2010 2012 2014 2016
SOURCE: US ENERGY INFORMATION ADMINISTRATION
Brent spot price FOB
Production—petroleum liquids
Australia’s production of oil, condensate and LPG has been trending down since it peaked in 2000.Australian petroleum liquids production (millions of barrels)
SOURCE: APPEA (UNTIL 2013), ENERGYQUEST (2014 ONWARDS)
1999 2001 2003 2005 2007 2009 2011 2013 2015 0 50 100 150 200 250 300 Crude Condensate LPG
Production of petroleum liquids by state/territory
(millions of barrels) Crude Condensate LPG 2014 2015 2014 2015 2014 2015 NSW – – – – – – NT 1.8 1.5 – – – – Qld – – – – – – SA 13.6 12.1 1.7 1.5 2.5 2.2 Tas – – 0.5 0.5 0.5 0.5 Vic 11.5 5.8 8.4 7.1 13.1 9.4 WA 56.6 56.6 34.0 31.7 7.3 5.9 Total 83.6 76.0 44.6 40.8 23.4 18.0
SOURCE: ENERGYQUEST | Note: includes production from Commonwealth Waters adjacent to each state or territory and excludes production from the JPDA.
Production—gas
Australia’s total production of natural gas has more than doubled since 1998. This increase in production has met both domestic and international market needs.
Total domestic natural gas production and LNG exports (mmcf)
SOURCE: APPEA (UNTIL 2013), ENERGYQUEST (2014 ONWARDS)
LNG Total domestic gas 1999 2001 2003 2005 2007 2009 2011 2013 2015 0 1000 500 2000 1500 2500
Australia has significant quantities of discovered gas resources, much of which remain undeveloped. Opportunities exist to develop new gas projects, including for residential and commercial use, domestic gas processing industries and export sales. Production of natural gas by state/territory (mmcf)
Conventional gas Natural gas from
coal seams LNG exports
2014 2015 2014 2015 2014 2015 NSW – – 4.5 5.8 – – NT 0.9 1.7 – – – – Qld 3.2 2.2 294.9 596.1 – 315.8 SA 94.2 94.1 – – – – Tas 13.0 14.1 – – – – Vic 319.8 316.7 – – – – WA 1462.9 1438.8 – – 1101.5 1065.2 Total 1894.1 1867.6 299.5 601.8 1101.5 1381.0 SOURCE: ENERGYQUEST | Note: includes production from Commonwealth Waters adjacent to
each state or territory and excludes production from the JPDA.
Petroleum exploration
The long-term growth in the Australian oil and gas industry depends on the level of exploration.
Oil and gas cannot be produced without first locating new resources and these cannot be discovered without drilling wells. Key variables that drive exploration decisions include: available and prospective acreage, capital availability, the costs of exploring, and the ability to commercialise discovered resources.
The current depressed crude oil price is affecting exploration activity, but it is not the only factor. Falling revenue means companies are cutting their exploration expenditure and fewer exploration wells are being drilled in Australia.
Annual exploration well activity and West Texas intermediate oil price
$0 $70 $140
SOURCE: US ENERGY INFORMATION ADMINISTRATION, APPEA
0 50 100 150 200 250 Offshore exploration wells (incl. appraisal) Onshore exploration
wells (incl. appraisal) WTI spot price FOB 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Australia imports and exports significant quantities of petroleum and petroleum-related products. Australia had a surplus in the trade of oil and gas until 2003–04, but has been a net importer since then. This may change in coming years, with the increase in LNG and condensate exports offsetting reduction in the domestic oil production (and the associated increased imports of oil). Trade in oil, gas and petroleum products ($ billion)
Economic significance
of the industry — trade
Oil and gas imports and exports 2014–15 ($ billion)
Exports Imports Crude 8.7 15.0 LNG 16.9 – LPG 0.8 – Products 0.5 19.3 Bunkers – – Total 26.9 34.3
SOURCE: DEPARTMENT OF INDUSTRY, INNOVATION AND SCIENCE 2016 SOURCE: DEPARTMENT OF INDUSTRY,
INNOVATION AND SCIENCE 2016 1999–0 0 2001–0 2 2003–0 4 2005–0 6 2007–0 8 2009–1 0 2011–1 2 2013–1 4 2014–1 5 2000–0 1 2002–0 3 2004–0 5 2006–0 7 2008–0 9 2010–1 1 2012–1 3 Imports LNG exports Exports (excl. LNG) 0 15 30 45
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Economic significance
of the industry — taxation
The fiscal framework is a key factor shaping investment decisions in the oil and gas industry. Producers are confronted with an array of taxes, charges and fees covering petroleum activities. Fiscal imposts include resource taxes (including the petroleum resource rent tax, petroleum royalties and production excise), company income tax and a wide variety of other taxes, fees and charges. Data compiled by APPEA indicates that on average, taxes account for around half of the industry’s overall level of pre-tax profit.Estimated petroleum industry profit (before tax) and taxation payments ($ billion)
SOURCE: APPEA FINANCIAL SURVEY
Tax as a percentage of pre-tax profit Taxes and
charges Profit plus taxes and charges 0 10 5 15 20 60% 80% 40% 20% 0% 1999–0 0 2001–02 2003–04 2005–0 6 2007–0 8 2009– 10 2011–1 2 2000–01 2002–03 2004–0 5 2006–07 2008–0 9 2010–1 1 2012–1 3 2013–1 4
Total payments to governments have averaged around $8 billion per year over the last five years. Total payments are expected to increase in the coming years as projects currently under construction start production, although lower prices may affect payments in the near-term.
Industry investment
The oil and gas industry has traditionally invested amounts that are greater than its level of profits. Since 1999–2000, based on value of total assets, the industry’s capital investment spending is nearly double its cumulative profits over the same period. Industry cumulative profits and investments ($ billion)
SOURCE: APPEA FINANCIAL SURVEY Cummulative net industry profit Total industry assets 0 100 50 200 250 150 300 350 1999–0 0 2001–0 2 2003–0 4 2005–0 6 2007–0 8 2009–1 0 2011–1 2 2000–0 1 2002–0 3 2004–0 5 2006–0 7 2008–0 9 2010–1 1 2012–1 3 2013–1 4
The number of projects in the publicly announced and feasibility stages rose during 2015.
LNG, gas, oil major project investment pipeline, October 2015
2014 2015 Change
No. of
projects A$ billionRange projectsNo. of A$ billionRange
Publicly announced 7 1–5+ 3 1.5–5+ -4
Feasibility stage 7 30 13 0.5–10 +6
Committed 13 197 11 195 -2
Completed 1 0.4 2 23.5 +1
SOURCE: DEPARTMENT OF INDUSTRY, INNOVATION AND SCIENCE 2016
There has been a significant improvement over the last decade in the Australian oil and gas industry’s rates of injuries and safety performance. In that time, the industry has experienced rapid growth and has introduced new operations.
Total recordable injury frequency rate (per million hours worked)
SOURCE: APPEA 0 8 2 4 6 10 2002 2000 2004 2006 2008 2010 2012 2014
Lost time injury frequency rate (per million hours worked)
0 2.0 2.5 1.0 0.5 1.5 3.0 SOURCE: APPEA 2002 2000 2004 2006 2008 2010 2012 2014
Safety information
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Resources
Selected international proven gas reserves and rank 2014 (tcf)
0 250 500 750 1000 1250
Australia (10)
United Arab Emirates (7) Venezuela (8) Algeria (9) Saudi Arabia (6) United States (5) Turkmenistan (4) Qatar (3) Iran (1) Russian Federation (2)
SOURCE: BP STATISTICAL REVIEW 2015
Australia’s estimated petroleum resources
Crude oil Condensate LPG Conventional gas Coal seam gas Shale gas Tight gas Total gas
mmbbl mmbbl mmbbl tcf tcf tcf tcf tcf EDR 966 2110 964 103 33 – – 136 SDR 298 622 377 54 60 2 – 116 Inferred – – – ~10 111 – 20 141 All identified resources 1264 2733 1342 167 203 2 20 392 Potential in- ground resource ~~ ~~ ~~ ~~ 235 396 ~~ 631 Resources: identified, potential and undiscovered 1264 2733 1342 167 235 396 20 819 SOURCE: GEOSCIENCE AUSTRALIA 2014
a p p e a w o u l d l i k e t o a c k n o w l e d g e t h e k i n d s u p p o r t o f e n e r g y q u e s t i n t h ep r e p a r a t i o n o f t h i s r e p o r t.
www.appea.com.au
Head Office Level 10 60 Marcus Clarke St Canberra ACT 2601 T +61 2 6247 0960 [email protected] Adelaide 19 Vardon Ave Adelaide SA 5000 T +61 8 8943 0675 [email protected] Perth Level 4 190 St George’s Tce Perth WA 6000 T +61 8 9426 7200 [email protected] Glossary of termsEDR economic demonstrated resources
JPDA Joint Petroleum Development Area zone in the Timor Sea from which Australia receives 10%, and Timor Leste 90%, of petroleum revenue LNG liquefied natural gas
LPG liquid petroleum gas mmcf million cubic feet mmbbl million barrels PJ petajoules
SDR sub-economic demonstrated resources
Spudded the process of commencing a well drilling process removing rock, dirt and other sedimentary material with the drill bit tcf trillion cubic feet
Brisbane Level 36 32 Turbot St Brisbane QLD 4000 T +61 7 3231 0500 [email protected]
EnergyQuest Level 30, 91 King William St, Adelaide SA 5000 T +61 8 8431 7903 www.energyquest.com.au Darwin
Suite 16, First Floor 48–50 Smith St Darwin NT 0800 T +61 433 917 317
