Crude oil production was down from 126.3 million barrels in 2004/05 to 113.3 million barrels in the latest year, according to the APPEA data.
Trends in other petroleum commodities showed increases ranging from 15.9% in liquefied natural gas sales, 3.3% in liquefied petroleum gas, 2.8% in condensate and 1.5% in domestic gas.
APPEA chief executive Belinda Robinson warned earlier this year that while high oil prices had created a perception of a booming industry, Australia now had a deficit in liquid petroleum production and there was a need for industry and government to work together to address this issue.
"Oil production is declining and although LNG is growing, this is not to the extent necessary to bridge the gap," Robinson said.
"These are not just industry interest issues, they are of crucial national interest."
Unless substantial new oil discoveries are made, the decline would continue, she said.
But most new finds in Australia are relatively small, partly because explorers are tending to stick to mature basins.
Over the last 10 years, the average size of a commercial oil discovery in Australia has been 23 million barrels, according to Wood Mackenzie's Global Oil and Gas Risks and Rewards Study 2004.
Industry and Resources Minister Ian Macfarlane said earlier this year that Australia was relatively lightly explored and the country needed to attract more exploration activity in frontier areas.
The Australian Government has invested an additional $60 million in pre-competitive geological data and offered true tax incentives for exploration in frontier areas. Some frontier projects will not attract Commonwealth royalties for up to 20 years.
Geoscience Australia is offering the industry seismic data, as well as geological sampling and oil seep detection information from several Australian frontier basins, including the Bremer, Mentelle, Vlaming and Arafura basins.
But many of these areaas are deepwater basins in which exploration would be risky and expensive, so finds would have to be huge to justify the cost.
Australia's new frontiers could deliver big oil finds, but so far Australia has in general proved to be prone to gas rather than oil.
