Federal Industry and Resources Minister Ian Macfarlane and Australian Petroleum Production & Exploration Association chief executive Belinda Robinson said a new strategic alliance between the upstream oil and gas industry and the federal, state and Northern Territory Governments would help deliver greater economic growth and greater resource security.
Macfarlane said the new industry strategy aimed to ensure that by 2015:
• Australia’s liquids production as a proportion of consumption will be at least at the 2006 level;
• LNG production capacity will exceed 50 million tonnes per annum;
• Natural gas as a competitive feedstock for resources processing will be doubled; and
• Gas usage for electricity generation will represent 70% of all new generation capacity in a competitive market, resulting in significantly lower growth in Australia’s greenhouse emissions.
“It’s not pie-in-the-sky policy,” Macfarlane told the National Oil & Gas Safety conference in Perth this morning.
“It’s industry-led ambitions, which will secure our national energy future as much as the future of our LNG exporters and producers.
“This new alliance will be an industry-led strategy to dramatically alter the ways and quantities in which natural gas is used for the Australian domestic market. The key is the industry, particularly APPEA, enthusiasm for this strategy because it will have to involve changing business and community attitudes about energy production and opening doors which are currently closed, but not locked to natural gas options.”
The policy is also aimed at increasing production of crude and condensate, according to Robinson.
“In 2003-04 Australia imported $1.5 billion more crude and condensate than it exported. This net import bill more than doubled to $3.7 billion in 2004-05,” she said.
“Without many more discoveries, that net oil import bill, based on current oil prices, could rise to $20 billion by 2015, resulting in lost taxation revenue of up to $3 billion per annum, equivalent to the total amount the Australian Government currently spends on government schools.
“Impediments to attracting greater exploration need to be further addressed.”
Robinson said the Australian Government had taken some important first steps, particularly by providing substantial funding for Geoscience Australia over the 2003-07 period for the pre-competitive geological information that companies need to make exploration risk assessments.
“But Australia remains very lightly explored,” she said.
“We simply don’t know what petroleum resources we have out there until we go looking. Generating that interest is central to this industry-led initiative,” she said.
Macfarlane also emphasised the importance of LNG.
"The underlying priority is to see Australia claim its rightful place as one of the world's top five LNG exporters," he said.
"We are currently still outside the top 10 despite our vast reserves."
Robinson said a first step in the Government-Industry collaborative process would involve finalising and distributing, by the end of March, an Issues Paper for public comment.
“The industry is aiming to publish a final strategy document by the end of 2006 that will build on the Australian Government’s Energy White Paper, the LNG Action Agenda and a number of recent positive policy initiatives by all governments to translate our aspirations for this industry into a successful platform for continuing Australian prosperity,” she said.
A Leadership Group, chaired by Woodside Energy’s Dr Agu Kantsler, has been established. It comprises representatives from industry, the Australian Government, officials supporting the Ministerial Council on Mineral and Petroleum Resources and leading research organisations.
