Australia is on track to become the world’s largest liquefied natural gas (LNG) exporter by
the end of our forecast period in 2021, surpassing Qatar as a series of major projects come online. The
boom in the construction of LNG export capacity should drive investment over the coming years, with as
much as US$200bn to be spent on new projects and upgrades. However, there are question marks over
the costs of Australian LNG relative to other suppliers. While gas exports are set to rise rapidly,
Australia will also have to contend with a growing reliance on oil imports as domestic production
declines.
The main trends and developments we highlight for Australia’s oil & gas sector are:
Coal bed methane (CBM) will increasingly contribute to the country’s gas output, particularly in
the east of the country, where CBM output will feed a number of LNG export terminals that are
now under development. We have upwardly revised our forecast for gas production and expect it
to hit 116.95bn cubic metres (bcm) by 2016. Much of this gas will be exported as LNG, largely
to Asian customers. By 2021, gas production is forecast to be 150.35bcm, with LNG exports
surpassing 100bcm. The expansion of LNG projects may be delayed, either because of the
weaker demand outlook or cost considerations, which pose a downside risk to our forecasts.
As of July 2012, the Petroleum Resource Rent Tax (PRRT) has been extended to cover onshore
petroleum projects and the North West Shelf project. Existing royalties and production excise
will continue to apply from these areas, but will be creditable against future PRRT liabilities
from each individual project. However, the Joint Petroleum Development Area in the Timor Sea
remains exempt.
Australia’s carbon trading scheme – the world’s second largest after the European Union – came
into effect on July 1 2012. Under this scheme, businesses will pay AUD23 (US$24.18) per tonne
of carbon produced. The price will rise by around 2.5% in real terms in 2014 and 2015, but will
be determined by the market, subject to a price ceiling and floor, in 2015. This could push the
country towards the greater use of gas for commercial and residential needs.
According to the country’s energy ministry, Australia is using oil three times faster than it is
finding it. In 2011, oil production fell by an estimated 14.5% year-on-year (y-o-y) from 549,210
barrels per day (b/d) in 2010 to 469,440b/d in 2011. In contrast, oil consumption rose 3.8% y-o-y
to hit 997,230b/d. Oil and gas liquids production is due to decline from 469,000b/d in 2011 to
458,700 b/d in 2016, eventually hitting 449,220/d in 2021.
Government forecasts suggest petroleum import dependency rose to 50% in 2010, and this is
expected to increase further to 78% by the end of our forecast period in 2021. In 2012, we expect
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 8
Australia to import an average 534,950b/d at a cost of US$20.90bn at an OPEC basket oil price
forecast of US$107.05/bbl. By 2016, the oil import requirement is expected to rise to
580,090b/d, costing some US$19.74bn (assuming an average OPEC basket oil price of
US$93.25/bbl).
Gas exports are forecast to rise to 79.46bcm by 2016, bringing in LNG revenues of around
US$39.33bn. Net petroleum export proceeds by 2021 are forecast at US$27,854bn, with the
higher LNG exports helping to offset the rising oil imports.
The refining environment remains weak in Australia. Shell’s 79,000b/d Clyde refinery in
Sydney will close in September 2012, while Caltex announced that it will shut down the Kurnell
refinery – Australia’s second largest with a capacity of 124,500b/d and also located in Sydney –
in the second half of 2014. The age, small size and relatively low complexity of the country’s
refineries has rendered them uncompetitive against regional counterparts.
2012 Australia Oil and Gas Industry
Published: September 2012 No. of Pages: 123 Price: US $ 1175
Table of Contents
BMI Industry View ... 7
SWOT Analysis ... 9
Australia Oil and Gas SWOT ... 9
Global Energy Market Outlook . 10
Oil: Getting Closer To Emerging Markets Inflection Point 10
Table: Oil Consumption Forecasts, 2010-2016 (’000b/d)... 12
Table: Oil Production Forecasts, 2010-2016 (’000b/d) .. 14
Regional Energy Market Outlook . 18
Frontier Plays & Brownfields Bolster Asia''s Upstream Outlook . 18
Table: Number Of Rigs in Operation In Asia, 2002-2012 ... 19
Australia Energy Market Overview .. 24
Table: Upstream Projects Database ... 25
Industry Forecast Scenario .. 26
Table: Australia Oil & Gas – Historical Data And Forecasts, 2009-2016 .. 26
Table: Australia Oil & Gas – Long-Term Forecasts, 2014-2021 . 27
Oil And Gas Reserves . 28
Oil Supply And Demand .. 30
Gas Supply And Demand 31
LNG 31
Coal Bed Methane/Coal Seam Gas . 32
Refining And Oil Products Trade 32
Revenues/Import Costs 32
Key Risks To BMI’s Forecast Scenario ... 32
Oil And Gas Infrastructure 33
Oil Refineries ... 33
Table: Refineries In Australia . 33
LNG Terminals 33
Table: LNG Terminals In Australia 34
North-Western WA .. 35
Northern Territory .. 40
East-Central Queensland 42
Regional And Country Risk/Reward Ratings .. 46
O&G Asia Risk/Reward Ratings . 46
Table: Asia Downstream Risk/Reward Ratings ... 49
Table: Asia Upstream Risk/Reward Ratings ... 50
Australia Upstream Rating – Overview .. 51
Australia Upstream Rating – Rewards 51
Australia Upstream Rating – Risks . 51
Australia Downstream Rating – Overview .. 51
Competitive Landscape ... 52
Executive Summary .. 52
Table: Key Players – Australia Oil & Gas Sector ... 53
Overview/State Role . 54
Government Policy . 54
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 4
Licensing Rounds 57
Table: Key Upstream Players . 60
Table: Key Downstream Players . 61
Company Monitor . 62
Woodside Petroleum 62
Santos .. 66
BHP Billiton . 70
Apache Corp 73
Chevron Australia 76
ConocoPhillips. 80
ExxonMobil Australia .. 84
Royal Dutch Shell 87
BG Group Australia . 90
Origin Energy – Summary .. 94
Dart Energy Summary 95
China National Offshore Oil Corporation (CNOOC) – Summary ... 95
BP – Summary 96
Petrobras/MEO – Summary 97
Roc Oil – Summary . 97
Inpex – Summary 98
Sinopec – Summary . 98
PTTEP – Summary .. 99
Murphy Oil – Summary . 100
Total – Summary ... 101
Hess – Summary 101
Statoil – Summary . 101
Others – Summary 102
Asia – Regional Appendix.. 105
Table: Oil Consumption – Historical Data & Forecasts, 2009-2016 (’000b/d) . 105
Table: Oil Consumption – Long-Term Forecasts, 2014-2021 (’000b/d) 105
Table: Oil Production – Historical Data & Forecasts, 2009-2016 (’000b/d) 106
Table: Oil Production – Long-Term Forecasts, 2014-2021 (’000b/d) ... 107
Table: Refining Capacity – Historical Data & Forecasts, 2009-2016 (’000b/d) ... 107
Table: Refining Capacity – Long-Term Forecasts, 2014-2021 (’000b/d) .. 108
Table: Gas Production – Historical Data & Forecasts, 2009-2016 (bcm) 109
Table: Gas Production – Long-Term Forecasts, 2014-2021 (bcm) 109
Table: Gas Consumption – Historical Data & Forecasts, 2009-2016 (bcm) . 110
Table: Gas Consumption – Long-Term Forecasts, 2014-2021 (bcm) 110
Table: LNG Exports – Historical Data & Forecasts, 2009-2016 (bcm) . 111
Table: Net LNG Exports – Long-Term Forecasts, 2014-2021 (bcm) . 111
Methodology And Risks To Forecasts .. 113
Glossary Of Terms .. 114
Table: Glossary of Terms .. 114
Oil And Gas Risk/Reward Ratings Methodology .. 116
Ratings Overview ... 116
Table: BMI’s Oil & Gas Business Environment Ratings – Structure . 117
Indicators ... 117
Table: BMI’s Oil & Gas Upstream Ratings – Methodology.. 118
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 5
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology .. 119
BMI Methodology 121
How We Generate Our Industry Forecasts 121
Energy Industry .. 121
Cross checks .. 122
Sources... 122Table: Oil Consumption Forecasts (’b/d)
Table: Oil Production Forecasts (’b/d)
Table: Number Of Rigs in Operation In Asia
Table: Upstream Projects Database
Table: Australia Oil & Gas – Historical Data And Forecasts
Table: Australia Oil & Gas – LongTerm Forecasts
Table: Refineries In Australia
Table: LNG Terminals In Australia
Table: Asia Downstream Risk/Reward Ratings
Table: Asia Upstream Risk/Reward Ratings
Table: Key Players – Australia Oil & Gas Sector
Table: Key Upstream Players
Table: Key Downstream Players
Table: Oil Consumption – Historical Data & Forecasts (’b/d)
Table: Oil Consumption – LongTerm Forecasts (’b/d)
Table: Oil Production – Historical Data & Forecasts (’b/d)
Table: Oil Production – LongTerm Forecasts (’b/d)
Table: Refining Capacity – Historical Data & Forecasts (’b/d)
Table: Refining Capacity – LongTerm Forecasts (’b/d)
Table: Gas Production – Historical Data & Forecasts (bcm)
Table: Gas Production – LongTerm Forecasts (bcm)
Table: Gas Consumption – Historical Data & Forecasts (bcm)
Table: Gas Consumption – LongTerm Forecasts (bcm)
Table: LNG Exports – Historical Data & Forecasts (bcm)
Table: Net LNG Exports – LongTerm Forecasts (bcm)
Table: Glossary of Terms
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
the end of our forecast period in 2021, surpassing Qatar as a series of major projects come online. The
boom in the construction of LNG export capacity should drive investment over the coming years, with as
much as US$200bn to be spent on new projects and upgrades. However, there are question marks over
the costs of Australian LNG relative to other suppliers. While gas exports are set to rise rapidly,
Australia will also have to contend with a growing reliance on oil imports as domestic production
declines.
The main trends and developments we highlight for Australia’s oil & gas sector are:
Coal bed methane (CBM) will increasingly contribute to the country’s gas output, particularly in
the east of the country, where CBM output will feed a number of LNG export terminals that are
now under development. We have upwardly revised our forecast for gas production and expect it
to hit 116.95bn cubic metres (bcm) by 2016. Much of this gas will be exported as LNG, largely
to Asian customers. By 2021, gas production is forecast to be 150.35bcm, with LNG exports
surpassing 100bcm. The expansion of LNG projects may be delayed, either because of the
weaker demand outlook or cost considerations, which pose a downside risk to our forecasts.
As of July 2012, the Petroleum Resource Rent Tax (PRRT) has been extended to cover onshore
petroleum projects and the North West Shelf project. Existing royalties and production excise
will continue to apply from these areas, but will be creditable against future PRRT liabilities
from each individual project. However, the Joint Petroleum Development Area in the Timor Sea
remains exempt.
Australia’s carbon trading scheme – the world’s second largest after the European Union – came
into effect on July 1 2012. Under this scheme, businesses will pay AUD23 (US$24.18) per tonne
of carbon produced. The price will rise by around 2.5% in real terms in 2014 and 2015, but will
be determined by the market, subject to a price ceiling and floor, in 2015. This could push the
country towards the greater use of gas for commercial and residential needs.
According to the country’s energy ministry, Australia is using oil three times faster than it is
finding it. In 2011, oil production fell by an estimated 14.5% year-on-year (y-o-y) from 549,210
barrels per day (b/d) in 2010 to 469,440b/d in 2011. In contrast, oil consumption rose 3.8% y-o-y
to hit 997,230b/d. Oil and gas liquids production is due to decline from 469,000b/d in 2011 to
458,700 b/d in 2016, eventually hitting 449,220/d in 2021.
Government forecasts suggest petroleum import dependency rose to 50% in 2010, and this is
expected to increase further to 78% by the end of our forecast period in 2021. In 2012, we expect
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 8
Australia to import an average 534,950b/d at a cost of US$20.90bn at an OPEC basket oil price
forecast of US$107.05/bbl. By 2016, the oil import requirement is expected to rise to
580,090b/d, costing some US$19.74bn (assuming an average OPEC basket oil price of
US$93.25/bbl).
Gas exports are forecast to rise to 79.46bcm by 2016, bringing in LNG revenues of around
US$39.33bn. Net petroleum export proceeds by 2021 are forecast at US$27,854bn, with the
higher LNG exports helping to offset the rising oil imports.
The refining environment remains weak in Australia. Shell’s 79,000b/d Clyde refinery in
Sydney will close in September 2012, while Caltex announced that it will shut down the Kurnell
refinery – Australia’s second largest with a capacity of 124,500b/d and also located in Sydney –
in the second half of 2014. The age, small size and relatively low complexity of the country’s
refineries has rendered them uncompetitive against regional counterparts.
2012 Australia Oil and Gas Industry
Published: September 2012 No. of Pages: 123 Price: US $ 1175
Table of Contents
BMI Industry View ... 7
SWOT Analysis ... 9
Australia Oil and Gas SWOT ... 9
Global Energy Market Outlook . 10
Oil: Getting Closer To Emerging Markets Inflection Point 10
Table: Oil Consumption Forecasts, 2010-2016 (’000b/d)... 12
Table: Oil Production Forecasts, 2010-2016 (’000b/d) .. 14
Regional Energy Market Outlook . 18
Frontier Plays & Brownfields Bolster Asia''s Upstream Outlook . 18
Table: Number Of Rigs in Operation In Asia, 2002-2012 ... 19
Australia Energy Market Overview .. 24
Table: Upstream Projects Database ... 25
Industry Forecast Scenario .. 26
Table: Australia Oil & Gas – Historical Data And Forecasts, 2009-2016 .. 26
Table: Australia Oil & Gas – Long-Term Forecasts, 2014-2021 . 27
Oil And Gas Reserves . 28
Oil Supply And Demand .. 30
Gas Supply And Demand 31
LNG 31
Coal Bed Methane/Coal Seam Gas . 32
Refining And Oil Products Trade 32
Revenues/Import Costs 32
Key Risks To BMI’s Forecast Scenario ... 32
Oil And Gas Infrastructure 33
Oil Refineries ... 33
Table: Refineries In Australia . 33
LNG Terminals 33
Table: LNG Terminals In Australia 34
North-Western WA .. 35
Northern Territory .. 40
East-Central Queensland 42
Regional And Country Risk/Reward Ratings .. 46
O&G Asia Risk/Reward Ratings . 46
Table: Asia Downstream Risk/Reward Ratings ... 49
Table: Asia Upstream Risk/Reward Ratings ... 50
Australia Upstream Rating – Overview .. 51
Australia Upstream Rating – Rewards 51
Australia Upstream Rating – Risks . 51
Australia Downstream Rating – Overview .. 51
Competitive Landscape ... 52
Executive Summary .. 52
Table: Key Players – Australia Oil & Gas Sector ... 53
Overview/State Role . 54
Government Policy . 54
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 4
Licensing Rounds 57
Table: Key Upstream Players . 60
Table: Key Downstream Players . 61
Company Monitor . 62
Woodside Petroleum 62
Santos .. 66
BHP Billiton . 70
Apache Corp 73
Chevron Australia 76
ConocoPhillips. 80
ExxonMobil Australia .. 84
Royal Dutch Shell 87
BG Group Australia . 90
Origin Energy – Summary .. 94
Dart Energy Summary 95
China National Offshore Oil Corporation (CNOOC) – Summary ... 95
BP – Summary 96
Petrobras/MEO – Summary 97
Roc Oil – Summary . 97
Inpex – Summary 98
Sinopec – Summary . 98
PTTEP – Summary .. 99
Murphy Oil – Summary . 100
Total – Summary ... 101
Hess – Summary 101
Statoil – Summary . 101
Others – Summary 102
Asia – Regional Appendix.. 105
Table: Oil Consumption – Historical Data & Forecasts, 2009-2016 (’000b/d) . 105
Table: Oil Consumption – Long-Term Forecasts, 2014-2021 (’000b/d) 105
Table: Oil Production – Historical Data & Forecasts, 2009-2016 (’000b/d) 106
Table: Oil Production – Long-Term Forecasts, 2014-2021 (’000b/d) ... 107
Table: Refining Capacity – Historical Data & Forecasts, 2009-2016 (’000b/d) ... 107
Table: Refining Capacity – Long-Term Forecasts, 2014-2021 (’000b/d) .. 108
Table: Gas Production – Historical Data & Forecasts, 2009-2016 (bcm) 109
Table: Gas Production – Long-Term Forecasts, 2014-2021 (bcm) 109
Table: Gas Consumption – Historical Data & Forecasts, 2009-2016 (bcm) . 110
Table: Gas Consumption – Long-Term Forecasts, 2014-2021 (bcm) 110
Table: LNG Exports – Historical Data & Forecasts, 2009-2016 (bcm) . 111
Table: Net LNG Exports – Long-Term Forecasts, 2014-2021 (bcm) . 111
Methodology And Risks To Forecasts .. 113
Glossary Of Terms .. 114
Table: Glossary of Terms .. 114
Oil And Gas Risk/Reward Ratings Methodology .. 116
Ratings Overview ... 116
Table: BMI’s Oil & Gas Business Environment Ratings – Structure . 117
Indicators ... 117
Table: BMI’s Oil & Gas Upstream Ratings – Methodology.. 118
Australia Oil & Gas Report Q4 2012
© Business Monitor International Ltd Page 5
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology .. 119
BMI Methodology 121
How We Generate Our Industry Forecasts 121
Energy Industry .. 121
Cross checks .. 122
Sources... 122Table: Oil Consumption Forecasts (’b/d)
Table: Oil Production Forecasts (’b/d)
Table: Number Of Rigs in Operation In Asia
Table: Upstream Projects Database
Table: Australia Oil & Gas – Historical Data And Forecasts
Table: Australia Oil & Gas – LongTerm Forecasts
Table: Refineries In Australia
Table: LNG Terminals In Australia
Table: Asia Downstream Risk/Reward Ratings
Table: Asia Upstream Risk/Reward Ratings
Table: Key Players – Australia Oil & Gas Sector
Table: Key Upstream Players
Table: Key Downstream Players
Table: Oil Consumption – Historical Data & Forecasts (’b/d)
Table: Oil Consumption – LongTerm Forecasts (’b/d)
Table: Oil Production – Historical Data & Forecasts (’b/d)
Table: Oil Production – LongTerm Forecasts (’b/d)
Table: Refining Capacity – Historical Data & Forecasts (’b/d)
Table: Refining Capacity – LongTerm Forecasts (’b/d)
Table: Gas Production – Historical Data & Forecasts (bcm)
Table: Gas Production – LongTerm Forecasts (bcm)
Table: Gas Consumption – Historical Data & Forecasts (bcm)
Table: Gas Consumption – LongTerm Forecasts (bcm)
Table: LNG Exports – Historical Data & Forecasts (bcm)
Table: Net LNG Exports – LongTerm Forecasts (bcm)
Table: Glossary of Terms
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
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