Australia Opens Bidding for Offshore Oil and Gas Exploration
The Australian government has launched the 2021 round of oil and gas licensing as part of strategies to promote offshore exploration.
The government announced that it has opened bidding for 21 exploration blocks across the Bonaparte, Browse, Carnarvon, Otway, Sorell and Gippsland basins off Western Australia, Victoria, Tasmania and the Ashmore and Cartier Islands. The blocks cover an area of around 80,000 square kilometers of new acreage, with bidding expected to close in March 2022.
Each year, Australian authorities invite companies to bid for the opportunity to invest in the oil and gas industry in the country, which is still committed to fossil fuels. “Exploration will continue to play a key role in supporting Australia’s economic growth by encouraging investment in development prospects, as well as unlocking additional supply,” said Keith Pitt, Minister for Resources, Water and Northern Australia.
He added the acreage area provides opportunities in established oil and gas provinces as well as under-explored areas that are within reach of existing infrastructure. “The continued release of areas for exploration is important to providing a steady supply of energy for the future. I would welcome and encourage industry bidding on the released areas,” he noted.
Available lease areas for 2021 (Australian Department of Industry)
Australia has emerged as an attractive investment location for offshore exploration owing to its vast seabed, which covers more than 14.6 million square kilometers. It is one of the largest marine jurisdictions in the world.
Many of the country’s oil and gas basins remain largely underexplored and have the potential to host significant volumes of hydrocarbons. Currently only around 20 percent of Australia's offshore basins are covered by E&P lease agreements.
“The annual acreage release is a crucial component of the government's gas-fired recovery plan. It is vitally important that Australians have access to reliable and affordable energy both now and in the future,” said Pitt.
Australia is witnessing a significant increase in exploration interest since Quadrant Energy, now owned by Santos Ltd, struck oil in the Dorado field in 2018. This was Australia’s biggest oil find since 1996.
A decision by Prime Minister Scott Morrison to anchor post-COVID-19 economic recovery on the gas industry has also incentivized exploration, considering that Australia is determined to overtake Qatar as the world’ largest exporter of liquefied natural gas.
The government reckons that the annual acreage licensing is crucial to its gas-fired recovery plan, something that saw the allocation of $45 million to fund various projects. Government data show that following a decade of decline, exploration spending rose 30 percent to $880 million in the year to June 2019.
The opening of the 2021 round of licensing comes after the country closed the 2020 round in June in which a total of 15 bids were received for 11 blocks. There were 42 blocks made available for bidding in the round.