Register      Login
Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

2023 PESA business environment review

Erin Wild A * , Emmanuel Adeyinfa A and Adrian Farrant B
+ Author Affiliations
- Author Affiliations

A KPMG Australia, Tower Two, Collins Square, 727 Collins Street, Melbourne, Vic. 3008, Australia.

B KPMG Australia, Level 11, Heritage Lanes, 80 Ann Street, Brisbane, Qld 4000, Australia.




Erin Wild is a Director in the Engineering and Asset Management team based in Melbourne, within KPMG’s national Deals, Advisory and Infrastructure division. With experience across engineering and operations functions, Erin specialises in advising asset-intensive organisations to maximise asset performance and achieve net zero goals. Erin focusses on the energy and natural resources sector advocating for life cycle asset management. Erin has experience in advising executive teams in building capability across people, process, change management and innovation. Erin has 20 years of professional executive experience in the O&G and Power & Utilities industries, bringing clarity to complex technical and business issues through a strong analytical approach and an ability to think differently about industry challenges. Working with all levels of organisations in Australia but also across the USA, West Africa, and Malaysia. Erin holds Engineering (Chemical) and Mathematical Science qualifications. Email: ewild2@kpmg.com.au.



Emmanuel Adeyinfa is an Associate Director in the Engineering and Asset Management team based in Melbourne, within KPMG’s national Deals, Advisory and Infrastructure division. Emmanuel has experience across the oil and gas value chain across engineering, operations, and commercial functions. His current position involves being a strategic partner for executive teams to provide a holistic and pragmatic approach towards tackling key industry challenges whilst achieving sustainability targets through effective operations and asset management strategies, commercialisation and effective stakeholder engagement to maximise asset value. With over 10 years of experience in conventional, and renewables energy projects, Emmanuel has delivered and led workstreams with multi-disciplinary teams in both technical and leadership capacities. He holds both Petroleum Engineering (Hons) and Master of Business Administration qualifications. Email: eadeyinfa@kpmg.com.au.



Adrian Farrant is an Associate Director in the Consulting practice of KPMG, based in Brisbane. He is a project manager and energy subject matter expert with 15 years of consulting, project management and project assurance experience, specialising in energy and natural resources capital projects and operations. He has managed complex major projects in oil, natural gas and other asset-intensive industries with total installed costs in the billions of dollars. He has managed projects across all project phases – Concept/Feasibility, FEED, Detailed Design and Operation of asset-intensive projects and operations, mainly working on large and complex major projects. Adrian holds a Master’s degree in Economics and Finance, and a Bachelor’s degree in Mechanical and Space Engineering (Hons). Email: afarrant1@kpmg.com.au.

* Correspondence to: ewild2@kpmg.com.au

Australian Energy Producers Journal 64 S14-S23 https://doi.org/10.1071/EP23274
Accepted: 15 February 2024  Published: 16 May 2024

© 2024 The Author(s) (or their employer(s)). Published by CSIRO Publishing on behalf of Australian Energy Producers.

Abstract

In 2023, the world faced increased local and global headwinds in achieving the goal of net zero emissions by 2050 due to geopolitical factors, global economic variables, advancing technology, and evolving policies and regulations. Despite a 22% rise in global investments for renewable energy, the world fell short of the 76% required for a Net Zero Emissions Pathway by 2050. There was a collective return to fossil fuels, particularly natural gas and liquefied natural gas (LNG), to meet the demand for secure and affordable energy amid global energy supply shocks. As a result of sustained elevated energy prices governments and energy companies are having to consider all three elements of the energy trilemma – affordability, sustainability, and security – in a more balanced way. The energy industry responded to these challenges by increasing investments in gas-oriented resources and the emergence of investments into the critical minerals value chain, indicating a historic convergence of multiple industries to address the global energy transition. Investment in new energy technologies to support decarbonisation continued, albeit at a slower pace than required. The energy transition also accelerated the decommissioning responsibilities of upstream energy producers for their mature infrastructure assets. As Australia and other countries globally, strive to deliver on net zero ambitions, the oil and gas sector continues to grapple with the delicate balancing act of providing reliable, affordable, secure and sustainable sources of energy, which only continues to emphasise the need for fossil fuels during this energy transition.

Keywords: CCUS, critical minerals, decarbonisation, decommissioning, energy, hydrogen, Investment, LNG, market dynamics, mergers and acquisitions, net zero, new energy, oil and gas, energy, policy, technology.

Biographies

EP23274_B1.gif

Erin Wild is a Director in the Engineering and Asset Management team based in Melbourne, within KPMG’s national Deals, Advisory and Infrastructure division. With experience across engineering and operations functions, Erin specialises in advising asset-intensive organisations to maximise asset performance and achieve net zero goals. Erin focusses on the energy and natural resources sector advocating for life cycle asset management. Erin has experience in advising executive teams in building capability across people, process, change management and innovation. Erin has 20 years of professional executive experience in the O&G and Power & Utilities industries, bringing clarity to complex technical and business issues through a strong analytical approach and an ability to think differently about industry challenges. Working with all levels of organisations in Australia but also across the USA, West Africa, and Malaysia. Erin holds Engineering (Chemical) and Mathematical Science qualifications. Email: ewild2@kpmg.com.au.

EP23274_B2.gif

Emmanuel Adeyinfa is an Associate Director in the Engineering and Asset Management team based in Melbourne, within KPMG’s national Deals, Advisory and Infrastructure division. Emmanuel has experience across the oil and gas value chain across engineering, operations, and commercial functions. His current position involves being a strategic partner for executive teams to provide a holistic and pragmatic approach towards tackling key industry challenges whilst achieving sustainability targets through effective operations and asset management strategies, commercialisation and effective stakeholder engagement to maximise asset value. With over 10 years of experience in conventional, and renewables energy projects, Emmanuel has delivered and led workstreams with multi-disciplinary teams in both technical and leadership capacities. He holds both Petroleum Engineering (Hons) and Master of Business Administration qualifications. Email: eadeyinfa@kpmg.com.au.

EP23274_B3.gif

Adrian Farrant is an Associate Director in the Consulting practice of KPMG, based in Brisbane. He is a project manager and energy subject matter expert with 15 years of consulting, project management and project assurance experience, specialising in energy and natural resources capital projects and operations. He has managed complex major projects in oil, natural gas and other asset-intensive industries with total installed costs in the billions of dollars. He has managed projects across all project phases – Concept/Feasibility, FEED, Detailed Design and Operation of asset-intensive projects and operations, mainly working on large and complex major projects. Adrian holds a Master’s degree in Economics and Finance, and a Bachelor’s degree in Mechanical and Space Engineering (Hons). Email: afarrant1@kpmg.com.au.

References

Allens Linklatters (2023a) Australia’s hydrogen industry is progressing, but not fast enough. Available at https://www.allens.com.au/insights-news/insights/2023/05/australias-hydrogen-industry-is-progressing-but-not-fast-enough/

Allens Linklatters (2023b) Supercharging Australia’s natural advantage in the global carbon capture and storage race. Available at https://www.allens.com.au/insights-news/insights/2023/09/supercharging-australias-natural-advantage-in-the-global-carbon-capture-and-storage-race/

Aramco (2023) Aramco to enter global LNG business by acquiring stake in MidOcean Energy. Press Release, 28 September. Available at https://www.aramco.com/en/news-media/news/2023/aramco-to-enter-global-lng-business-by-acquiring-stake-in-midocean-energy

ARENA (2023) Australian Hydrogen gets a Headstart. Australian Renewable Energy Agency, Press release, 18 October. Available at https://arena.gov.au/news/australian-hydrogen-gets-a-headstart/

Ashurst (2023) Transboundary CCUS projects a step closer for Australia. Available at https://www.ashurst.com/en/insights/transboundary-ccus-projects-a-step-closer-for-australia/

BloombergNEF (2023) Cost of Clean Energy Technologies Drop as Expensive Debt Offset by Cooling Commodity Prices. Press Release, 7 June. Available at https://about.bnef.com/blog/cost-of-clean-energy-technologies-drop-as-expensive-debt-offset-by-cooling-commodity-prices/

BP (2023a) 2022 Full Year and 4Q – Financial Results and Update on Strategic Progress. Available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-fourth-quarter-2022-results-presentation-slides-and-script.pdf

BP Australia (2023) BP pulse keeping Aussie EV wheels turning. Press Release, 3 November. Available at https://www.bp.com/en_au/australia/home/media/press-releases/bp-pulse-keeping-aussie-ev-wheels-turning.html

Chevron (2023) Thevenard Island decommissioning achieves major milestone. Press release, 15 June. Available at https://australia.chevron.com/news/2023/thevenard-island-decommissioning-achieves-major-milestone

ConocoPhillips (2023) ConocoPhillips Announces Plans to Become Upstream Operator and Agreement to Purchase Additional Shareholding Interest in APLNG. Press Release, 27 March. Available at https://www.conocophillips.com/news-media/story/conocophillips-announces-plans-to-become-upstream-operator-and-agreement-to-purchase-additional-shareholding-interest-in-aplng/

CSIRO (2023a) Australian Government – Hydrogen Industry Policy Initiatives – The National Hydrogen Strategy. Available at https://research.csiro.au/hyresource/policy/australia/australia/

CSIRO (2023b) HyResource – Industry – Active. Available at https://research.csiro.au/hyresource/projects/facilities/

CSIRO (2023c) Capturing global attention: Carbon capture, utilisation, and storage. Available at https://www.csiro.au/en/news/all/articles/2023/september/ccus-explainer

DCCEEW (2022) Energy Price Relief Plan. Department of Climate Change, Energy, the Environment and Water, 3 December. Available at https://www.dcceew.gov.au/energy/programs/energy-price-relief-plan

DCCEEW (2023a) Review of the National Hydrogen Strategy. Department of Climate Change, Energy, the Environment and Water, 7 July. Available at https://consult.dcceew.gov.au/review-of-the-national-hydrogen-strategy

DCCEEW (2023b) EPBC Act reform. Department of Climate Change, Energy, the Environment and Water, Press release, 30 November. Available at https://www.dcceew.gov.au/environment/epbc/epbc-act-reform

DISER (2023a) Resources and Energy Major Projects – 2023 Report. Department of Industry, Science and Resources, 18 December. Available at https://www.industry.gov.au/publications/resources-and-energy-major-projects-2023

DISER (2023b) Decommissioning the Northern Endeavour. Department of Industry, Science and Resources, 1 December. Available at https://www.industry.gov.au/mining-oil-and-gas/oil-and-gas/offshore-oil-and-gas/decommissioning-northern-endeavour

DISER (2023c) Building an offshore decommissioning industry: have your say. Department of Industry, Science and Resources, 13 September. Available at https://www.industry.gov.au/news/building-offshore-decommissioning-industry-have-your-say

EAF (2023) Australia’s natural gas security policy spills over the region. East Asia Forum, 28 September. Available at https://eastasiaforum.org/2023/07/20/australias-natural-gas-security-policy-spills-over-the-region/

Energy News Bulletin (2023) Australia oil and gas M&A tops US$7bn in 2023 despite turmoil. Available at https://www.energynewsbulletin.net/m-a/news/1461854/australia-oil-and-gas-m-tops-ususd7bn-in-2023-despite-turmoil

Energy Storage News (2024) Australia needs renewables, transmission, and lots of storage to quit fossil fuels. Available at https://www.energy-storage.news/australia-needs-renewablestransmission-and-lots-of-storage-to-quit-fossil-fuels/

ExxonMobil (2023a) ExxonMobil drilling first lithium well in Arkansas, aims to be a leading supplier for electric vehicles by 2030. Press Release, 13 November. Available at https://corporate.exxonmobil.com/news/news-releases/2023/1113_exxonmobil-drilling-first-lithium-well-in-arkansas

ExxonMobil (2023b) Contractors to bid to execute decommissioning activities for Esso Australia Gippsland Basin facilities. Press release, 23 May. Available at https://www.exxonmobil.com.au/news/newsroom/news-releases-and-alerts/2023/contractors-to-bid-to-execute-decommissioning-activities

Financial Times (2023) Can Shell close the valuation gas with US rivals? Available at https://www.ft.com/content/1d3b8a08-f5e0-4dd1-9b39-b07b39f11d40

GIG (2023) Macquarie Asset Management’s Green Investment Group and Shell Energy to deliver large-scale battery project in Melbourne. Green Investment Group, Press release, 31 March. Available at https://www.greeninvestmentgroup.com/en/news/2023/macquarie-asset-managements-green-investment-group-and-shell-energy-to-deliver-large-scale-battery-project-in-melbourne.html

GWA (2023) Carbon capture study reveals major opportunity for WA. Government of Western Australia Press release, 17 November. Available at https://www.wa.gov.au/government/media-statements/Cook-Labor-Government/Carbon-capture-study-reveals-major-opportunity-for-WA-20231117

Hancock Prospecting (2023) Hancock’s Warrego acquisition wins Mergermarket’s Mid-Market M&A Deal of the Year. Press Release, 25 October. Available at https://www.hancockprospecting.com.au/hancocks-warrego-acquisition-wins-mergermarkets-mid-market-ma-deal-of-the-year/

IEA (2021) Net Zero by 2050: A roadmap for the global energy sector. International Energy Agency. Available at https://iea.blob.core.windows.net/assets/7ebafc81-74ed-412b-9c60-5cc32c8396e4/NetZeroby2050-ARoadmapfortheGlobalEnergySector-SummaryforPolicyMakers_CORR.pdf

IEA (2023a) Fuel Report: The Oil and Gas Industry in Net Zero Transitions. International Energy Agency. Available at https://www.iea.org/reports/the-oil-and-gas-industry-in-net-zero-transitions

IEA (2023b) World Energy Outlook. International Energy Agency. Available at https://www.iea.org/reports/world-energy-outlook-2023

IEA (2023c) Lagging policy support and rising cost pressures put investment plans for low-emissions hydrogen at risk. Press release, 22 September. Available at https://www.iea.org/news/lagging-policy-support-and-rising-cost-pressures-put-investment-plans-for-low-emissions-hydrogen-at-risk

Lamboll RD, Nicholls ZRJ, Smith CJS, Kikstra JS, Byers E, Rogelj J (2023) Assessing the size and uncertainty of remaining carbon budgets. Nature Climate Change 13, 1360-1367.
| Crossref | Google Scholar |

Leading Edge Energy (2023) Australia’s pace of investment in renewable energy is too slow. Available at https://www.leadingedgeenergy.com.au/blog/australias-pace-of-investment-in-renewable-energy-is-too-slow/

Lowy Institute (2023) The great offshore decommissioning. Available at https://www.lowyinstitute.org/the-interpreter/great-offshore-decommissioning

McDermott (2023) McDermott Awarded Decommissioning Contract by Santos. Press release, 21 November. Available at https://www.mcdermott-investors.com/news/press-release-details/2023/McDermott-Awarded-Decommissioning-Contract-by-Santos/default.aspx

Monash University (2023) Australia’s nascent hydrogen industry challenges: Four contrasting perspectives. Press release, 15 November. Available at https://lens.monash.edu/@climate-change-rising-to-the-real-urgent-and-globa/2023/11/15/1386263/australias-nascent-hydrogen-industry-challenges-four-contrasting-perspectives

Net Zero Tracker (2023) Data Explorer. Press release, 1 January. Available at https://zerotracker.net/

Presley J (2024) US Upstream M&A Sets $192 Billion Record for 2023. Journal of Petroleum Technology, 25 January. Available at https://jpt.spe.org/us-upstream-m-a-sets-192-billion-record-for-2023

Prime Minister of Australia (2023) $2 billion critical minerals boost crucial to energy transition. Press Release, 24 October. Available at https://www.pm.gov.au/media/2-billion-critical-minerals-boost-crucial-energy-transition

Santos (2023a) 2023 Investor Day. Press release, 22 November. Available at https://www.santos.com/wp-content/uploads/2023/11/Santos-Investor-Day-2023.pdf

Santos (2023b) Moomba CCS progressing at pace and on track for 2024. Press release, 15 May. Available at https://www.santos.com/news/moomba-ccs-progressing-at-pace-and-on-track-for-2024/

Shell (2023) Shell to deliver more value with less emissions. Press release, 14 June. Available at https://www.shell.com/media/news-and-media-releases/2023/capital-markets-day-2023-media-release.html?mc_cid=2d7db80a0c&mc_eid=35883950e5

Shell Energy (2023) The Riverina Energy Storage System 1 reaches operational milestone. Press release, 13 October. Available at https://shellenergy.com.au/energy-insights/the-riverina-energy-storage-system-1-reaches-operational-milestone/

The Commonwealth (2023) New guide to help governments manage costly oil and gas closures. Press release, 9 January. Available at https://thecommonwealth.org/news/new-guide-help-governments-manage-costly-oil-and-gas-closures

TotalEnergies (2023) Australia: TotalEnergies acquires a 26% interest in the Cash-Maple gas discoveries for the long-term supply of Ichthys LNG. Press Release, 21 August. Available at https://totalenergies.com/media/news/press-releases/australia-totalenergies-acquires-26-interest-cash-maple-gas-discoveries

COP28 (2023) The UAE consensus negotiations outcome. United Nations Climate Change COP28 UAE. Available at https://www.cop28.com/en/the-uae-consensus-negotiations-outcome

Upstream Online (2023) Record Australian upstream M&A deals, despite regulatory turmoil. Available at https://www.upstreamonline.com/finance/record-australian-upstream-m-a-deals-despite-regulatory-turmoil/2-1-1552262

Valle S (2023) Exxon smashed western oil majors earning record with 59 billion profit. Reuters, 1 February. Available at https://www.reuters.com/business/energy/exxon-smashes-western-oil-majors-earnings-record-with-59-billion-profit-2023-01-31/

Wood Mackenzie (2023) ‘Is the oil and gas decarbonisation charter a big deal?’ (Wood Mackenzie: Edinburgh, UK)

Wood Mackenzie (2024) ‘Global upstream M&A in brief: 2023 archive.’ (Wood Mackenzie: Edinburgh, UK)

Woodside Energy (2023a) Woodside to sell 10% Scarborough interest to LNG Japan. Press release, 8 August. Available at https://www.woodside.com/docs/default-source/asx-announcements/2023-asx/woodside-to-sell-10-scarborough-interest-to-lng-japan.pdf?sfvrsn=caa9b47f_3

Woodside Energy (2023b) Investor Briefing Day 2023. Press release, 8 November. Available at https://www.woodside.com/docs/default-source/asx-announcements/2023-asx/investor-briefing-day-2023.pdf)

Woodside Energy (2023c) Nganhurra Riser Turret Mooring Removal Project Report Information Sheet. Available at https://www.woodside.com/docs/default-source/current-consultation-activities/nganhurra-riser-turret-mooring-removal-project-report-information-sheet-september-2023