The case for shared infrastructure to unlock onshore resources

Abstract

This paper outlines the current state of the upstream industry for smaller oil and gas developers in Australia’s mature onshore basins. In particular, a strategic review of the market landscape based on Porter’s Five Forces model is undertaken from a junior exploration company’s perspective with a focus on barriers to market entry, such as access to infrastructure, capital, assets and expertise. In the strategic framework context, the paper examines the opportunities to break down natural monopolistic structures and barriers to entry across incumbent producers, pipeline transportation companies and contractors. It also investigates potential changes in resource policy dealing with access to infrastructure and general development requirements. In its analysis, the importance of junior explorers to extend the longevity of mature basins by looking at other petroleum provinces around the globe is highlighted. Examples in North America (onshore) and the UK (offshore) are used to showcase approaches in assisting smaller companies converting resources into reserves. In its conclusion, the paper demonstrates qualitatively how shared infrastructure, coopetition and incorporating renewables can be game changers for junior explorers in unlocking further resources and new prospects in the Australian onshore hydrocarbon provinces. The paper also calls for further coordination between companies, industry bodies and government under an improvement framework to ensure continued success.