This expenditure would be the highest in real terms since 1982-83, or 74% higher than the annual average over the past 25 years, the Federal Government research organisation found.

“Increased petroleum expenditure has been encouraged by historically high global oil prices,” ABARE said.

“With world oil prices forecast to remain relatively high in the short term, exploration expenditure can be expected to remain historically high.”

Over the medium term, ABARE said exploration expenditure would be influenced by other factors.

“These include longer-term oil price trends; Australia’s relative prospectivity for petroleum; prospects for Australian companies’ share of growing global LNG trade; the need for long-term planning, particularly for relatively expensive offshore petroleum; exploration costs; availability of skilled labour; and the concurrent commitment of resources (funds equipment and labour),” it said.

In the six months to April 2007, two natural gas projects were completed, both in Western Australia.

The larger of the two was the $433 million stage 4 expansion of the Dampier-Bunbury pipeline, which will increase capacity by 100 terajoules per day.

In addition, Woodside completed its $326 million Goodwyn A Low Pressure Train, located 130km off the coast, which will improve gas recovery and production at the project.