Norwegian-based energy company, Equinor, has announced it will discontinue its exploration drilling plan (Stromlo-1) in the Ceduna sub-basin, offshore South Australia.
Following a holistic review of its exploration portfolio, Equinor concluded that the project’s potential ‘is not commercially competitive compared with other exploration opportunities in the company’.
Equinor’s Environment Plan had been assessed by Australia’s independent regulator, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), who approved the proposed drilling activity in December last year.
“The approval of the Stromlo-1 exploration well Environment Plan confirmed our ability to safely operate in the Bight. However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive,” said Jone Stangeland, Equinor’s country manager for Australia.
Equinor has informed federal, South Australian and local authorities about its decision.
The company entered the licences in the Ceduna sub-basin as a partner in 2013 and took over as operator with a 100 per cent equity share in 2017.
“We will engage with the federal and state authorities regarding our decision to discontinue the exploration program. We hold an exploration permit offshore Western Australia and will maintain other ongoing interests and activities in Australia,” Mr Stangeland said.
Non-governmental environmental advocacy organisation, The Wilderness Society, welcomed the company’s decision.
Wilderness Society South Australian Director, Peter Owen, said: “It’s been a while coming, but the right decision is the right decision and we have no doubt that the hundreds of thousands of people that have supported the campaign to Fight for the Bight will be delighted and relieved to hear.”
The Australian Petroleum Production and Exploration Association (APPEA) said that Equinor’s decision to not continue its Great Australian Bight exploration program is ‘disappointing’ – for the wider Australian community who need new local energy supply, and for South Australians who would have benefitted from the economic activity.
APPEA’s Director South Australia, Matthew Doman, said that a 2018 study by ACIL Allen found successful oil exploration in the Great Australian Bight could see the creation of more than 2,000 jobs in South Australia and generate over $7 billion in average annual tax revenue to Federal and State governments over the next four decades.
“Successful development could also boost our energy security. Australia’s oil production has fallen significantly over the last 10 years, and we now import over 80 per cent of the oil we use,” he said.
“While our energy mix is changing, all credible analysis shows Australia will use a lot of oil and gas for decades to come.”
“The proposed exploration activity had been subject to an extreme campaign of false and exaggerated claims that deliberately overstated the risks and ignored the potential benefits.”
“Of course, any exploration and development have to be done in an environmentally safe manner. We have to make sure there’s no negative impact on existing industries or coastal communities – and the industry remains committed to that.”
Minister for Resources, Water and Northern Australia, Keith Pitt, maintained that the company is not leaving Australia.
“Equinor has made it clear this was a commercial decision and the company will continue to be part of the Australian oil and gas industry,” Minister Pitt said.
“I know many will find Equinor’s decision not to proceed with this oil exploration project in the Great Australian Bight extremely disappointing, and it is particularly hard for South Australia.”
“The Liberals and Nationals Government remains committed to encouraging the safe development of Australia’s offshore petroleum resources, which is overseen by a world-class independent regulator, NOPSEMA,” the Minister commented.
