According to the recently released EnergyQuest quarterly March 2024 report, Australia’s petroleum production peaked in 2022 and fell by 18 million barrels of oil equivalent in 2023.
EnergyQuest links the drop in Australian production to a lack of discovery for new resources, claiming that the frontier spirit of exploration in Australia is waning as corporations are concerned about risks, expenses, and the necessity of exploration.
Producing greener, low-carbon products is increasing internationally, but EnergyQuest draws a lesson from the nickel industry: obtaining a green premium from consumers is extremely difficult, despite greater prices.
Green hydrogen is struggling with increased costs which are up 35 per cent to 60 per cent, this increases the cost of green hydrogen to four times the Hydrogen Strategy target of $2 per kilogram.
Santos had a victory in the courts in favour of the Barossa project, but the cost and delays served to increase the risk premium for doing business in Australia.
The two NT LNG projects came to the rescue when the Blacktip gas supply decline continued, these projects supplied 25 per cent of NT’s domestic gas in the December 2023 quarter.
This report also inspects how the market is balanced and explores the impact LNG imports, storage and batteries may have.
Key statistics include:
- Australia’s run of annual production records, off the back of the LNG investment boom, came to an end in 2023. Total national petroleum production decreased from 1,096 million barrels of oil equivalent (MMboe) in 2022 to 1,078 MMboe in 2023, marking the first annual decrease since 2013 when production was less than half of current levels.
- An eight-year run of national LNG production records ended in 2023, with total shipments of 80.7 million tonnes (Mt) falling slightly short of the 81.2 Mt shipped in 2022. National production increased every year from 30.2 Mt in 2015 to 81.2 Mt in 2022 as seven mega-projects of Australia’s LNG investment boom came online, beginning with QCLNG in 2015 and ending with Prelude in 2019.
- East Coast conventional gas production was down 18.4 per cent QOQ. This represents the lowest December quarter production in EnergyQuest’s data series, which began in 2002. The decline was led by a sharp fall in output from the Gippsland Basin Joint Venture.
- Domestic gas spot prices in WA were 46.1 per cent higher in Q4 QOQ at $9.19/GJ. The WA spot price has been on a downward trend since June 2023 but remains well above historical levels. Santos’ west coast gas price was 17.3 per cent higher QOQ to $7.72/GJ – a record high for Santos. Woodside’s average WA domestic gas price in Q4 was $6.80/GJ, up 28.3 per cent from a year before. By contrast, short-term East Coast gas prices averaged $10.77/GJ in Q4, 39.6 per cent lower QOQ.
- Oil continued to shrink with total production for 2023 declining by 20.5 per cent compared to 2022, to only 31.2 million barrels. National production has halved since 2016 and is only one-third of the level of 2011.
Read the full EnergyQuarterly Report March 2024 document here.
