The latest oil and gas news covers the annual Australasian Oil & Gas Exhibition & Conference (AOG 2017) which was held in Perth last week. This is the first major industry event in the global 2017 oil & gas event calendar; with an estimated 8,000 attendees and more than 300 exhibitors from 15 different countries.

Key conference themes focused on collaboration, innovation and diversity. The era of integration of gas and renewables is here.

“It is imperative for Australia’s oil and gas industry to collaborate at this time entering the production and maintenance phase. While safety is uppermost and can never be compromised, the reliability of our projects is still in question… they were not only behind schedule, but also taking longer than expected to get up to production volumes.” – Bernadette Cullinane, Deloitte Australia Oil and Gas Leader

There are lots of industry examples which illustrate the conference themes, such as:

• Woodside Petroleum’s announcement of a collaboration programme with NASA to deploy a’ dexterous humanoid robot’ in its oil & gas operations
• Shell has announced that Australia is one of 3 countries in which it will investigate combining gas and renewable energy to support a more secure power supply
• Woodside is driving a collaborative study with shipping and mining companies to assess the commercial feasibility of liquified natural gas (LNG) fuelled iron ore carriers, opening a new market for LNG as a marine fuel

Australia Oil and Gas News 2016

Australia oil and gas news in 2016 showed it was undoubtedly a very tough year. This is characterised by high profile project delays, cost overruns, complex commissioning challenges, capital austerity and a sharp decline in exploration. 2016, however, did also see a 23% increase in gas production compared to 2015; driven by higher coal seam gas production, and conventional gas production.

Australia Oil and Gas News 2017 and Beyond

AOG 2017 keynote speakers commented there are definite signs that there are “green shoots” of positive growth appearing for the local (Australian) industry. Bernadette Cullinane noted:

“There had been positive announcements both locally and internationally that the leading oil and gas companies were now increasing their spending after two to three years of cutbacks”

Industry experts believe that the future is bright for Australia, and for the oil and gas industry. Cullinane continued to say:

“After the $250 billion of investment, we have the world’s best set of new [LNG] assets. It is now time to thrive to secure our place as not only the world’s largest LNG exporter, but also the most economic and reliable supplier.”

As the period of ‘mega’ project construction in Australia comes to an end, “those mega projects will now offer up massive new opportunities for the local oil and gas industry over the next 40 years”. However, this will require an investment of approximately AU$550 bn dollars to maintain and upgrade Australia’s LNG projects over the next 25 years. Decommissioning of aging offshore oil and gas infrastructure also presents a future opportunity for Australia oil & gas which could be worth anything up to $27bn.

Australia Oil & Gas Growth 2017

Australia will be a major contributor of LNG to the global market in 2017 and beyond.  For example:

• Liquids production is forecast to increase by 21% and Australian gas production by 58% in 2017.
• The value of Australian LNG exports of forecast to increase by 50% to AU$37bn.
• Of total new global LNG supply, expected between 2017 and 2020, around 25% is forecast to come from Australia as it ramps up production.

Furthermore, Australia’s largest oil & gas producer, Woodside Petroleum, has just posted a sharp rebound in profitability for the first half of the 2017 financial year. This follows a full year profit of $US686m for 2016. Woodside is considering increasing production at its Pluto LNG plant in Western Australia, potentially positioning the facility as a hub for undeveloped gas fields in the region.

Marketwatch’s Robb Stewart explains Peter Coleman, Woodside CEO, said:

“The mid- to longer-term demand outlook for LNG… remains strong and new markets for the fuel are being established. Global supply currently outstrips demand, after multibillion-dollar investments in new facilities in Australia and as the U.S. begins exporting. Yet Mr. Coleman said demand continues to grow, and unlike the oil industry there are no stockpiles of LNG or loaded cargo ships floating at sea.”

Studies suggest that by about 2023, the rise in demand will outpace projected supply.

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