FUTURE FINANCING AND OWNERSHIP OF THE AUSTRALIAN PETROLEUM EXPLORATION INDUSTRY

Abstract

The cumulative deficit between Australia's petroleum requirements of the 30 years to the end of the century and projected domestic production has been estimated at 14.25 billion barrels.

Oil exploration in Australia to 31 December 1971 cost $725 million and resulted in the discovery of 2.1 billion barrels of oil and 14.1 trillion cubic feet of natural gas. If this expenditure to discovery ratio is maintained we will need to spend a further $3,485 million on exploration to maintain only 70% self sufficiency in crude supplies.

The alternatives to supplying a high proportion of demand from local production are frightening. The foreign exchange required to purchase the presently projected shortfall in 1984/85 at what we consider will be conservative prices is almost half Australia's record foreign exchange holdings at 30 June 1972. Further, by that time we will be competing with the other industrialised countries of the world for an increasingly scarce commodity.

The major means of encouraging the expenditure of exploration moneys is to create a climate in which successful explorers are adequately rewarded. The unique position of indigenous crude prices must be corrected and gas sales encouraged. To maintain a meaningful Australian interest in the future finds local investors must be given suitable incentives to risk the necessary exploration funds.