Australian petroleum production and development 2018

Abstract

This Petroleum Exploration Society of Australia review looks in detail at the trends and highlights for oil and gas production and development both onshore and offshore Australia during 2018. Total petroleum production climbed strongly for the third consecutive year, driven by LNG. A highlight is the start-up of the INPEX Ichthys project. Production is set for further growth in 2019 with the ramp-up of this project and the start-up of Shell’s Prelude floating LNG project. Prelude and Ichthys are the last projects to be commissioned in a wave of seven new LNG projects that are making Australia the world’s largest LNG exporter and a crucial supplier of gas to Asia, including the largest source of LNG for Japan and China and the second-largest source for South Korea. By contrast, Australian oil production continued to fall rapidly and is now easily surpassed by rising condensate production from new LNG projects. There were stark contrasts between domestic gas on the west and east coasts. On the west coast, prices remain low and supply relatively plentiful. The east coast domestic market was tighter and LNG producers responded by diverting gas supplies to the domestic market. This paper canvasses these trends and makes conclusions about the condition of the oil and gas industry in Australia. This paper relies primarily on production and reserves data compiled by EnergyQuest and published in its EnergyQuarterly reports.