According to the Australian Bureau of Agriculture and Resource Economics, oil output is set to drop 8% to 450,000 barrels a day as shutdowns of offshore wells cancel-out the effect of project start-ups.

ABARE said the lower production forecast "reflects technical difficulties at a number of fields".

In December, Santos cut output at the Mutineer-Exeter fields off Western Australia by about one-tenth to 4000-5000bopd due to electrical damage to underwater pumps, while Woodside Petroleum halted the Corallina field in September because of a gas leak.

However, the ABARE commodities report said oil output was set to rise again by about 7% to 483,000bopd in fiscal 2009, buoyed by the start-up of the Angel, Skua/Swift and Vincent fields and the ramp-up of production at BHP Billiton's Stybarrow field.

Longer-term, Australian oil production is predicted to decline "at a moderate rate" as the additions by new projects are cancelled out by lower production from maturing fields.

Meanwhile, ABARE also forecasts that LNG production may decrease 3% to 14.8 million tonnes due to maintenance shutdowns at the North West Shelf Venture and Darwin LNG plants.

However, exports are due to jump to 16.9MMt the following year following an expansion of NWSV and to 26MMt by 2012-13.

The bureau predicted that Australian LNG exports may be worth $A6 billion in fiscal 2008, then almost doubling to $11.1 billion in 2012-13.