APPEA 2015: Australian gas industry tasked to fulfil its potential

Federal Minister for Industry and Science Ian Macfarlane addressing APPEA 2015.

Federal Minister for Industry and Science Ian Macfarlane addressing APPEA 2015.

The Australian Petroleum Production and Exploration Association (APPEA) Conference and Exhibition 2015 met in Melbourne from 17–20 May discussing the need to ensure the industry fulfils its potential.

Federal Minister for Industry and Science Ian Macfarlane used the conference to launch the Federal Government’s 2015 offshore petroleum acreage release, highlighting the Government’s drive to develop Australia’s natural gas resources.

Mr Macfarlane also said the Government remains committed to streamlining the regulatory process, while encouraging innovation within the industry.

When asked about Merlin Energy Australia, one of four companies shortlisted to develop the proposed Northern Territory to East Coast Interconnect Gas Pipeline, Mr Macfarlane said his understanding is that it is a bona fide company.

APPEA Chairman Bruce Lake told the first morning of the conference that it is the responsibility of the industry to promote itself.

“We cannot leave it to governments alone to promote and defend our interests,” Mr Lake said.

“Our industry has a great story to tell and it’s our responsibility to tell it.”

Day 2

The opening presentations for the second morning provided some unique insights into the importance of exploration in developing the industry.

Dr Jim Reilly, Astronaut and Geologist, talking on the importance of expanding our knowledge base and its applications in frontier exploration.

Selected as a specialist astronaut by NASA, Dr Reilly provided a unique insight into the similarities between oil and gas exploration and space travel, and reducing the risk of human error in projects.

BP Exploration Asia Pacific Vice President Dr Bryan Ritchie looked at global trends in exploration, the Great Australian Bight and new frontiers.

Dr Ritchie said the company has four commitment wells scheduled over 2016, with two wells to be drilled before taking a break at the end of the licence period.

CNOOC Australia Chief Representative and CNOOC NWS Private Ltd Managing Director Yongfeng Lu focused on CNOOC’s experience in exploring new frontiers and its success in foreign trade and investment.

Mr Lu spoke on his company’s wide-ranging deals in the oil and gas industry, as well as its role in many key projects.

IHS Upstream Asia-Pacific Research and Consulting Head Dylan Mair also informed the crowd that while Australia remains an attractive prospect for production, exploration, particularly for new entrants, remains burdened by regulatory barriers and higher costs.

Day 3

Day 3 saw a focus on the mega gas projects currently in transition, specifically the need to maintain investment opportunities.

Shadow Minister for Resources Gary Gray AO outlined the $1 billion in state revenues ahead for Queensland on the back of the CSG sector.

Mr Gray also voiced his strong support for the industry body, highlighting the need for increased supplies to lower prices.

Chevron Australia Managing Director Roy Krzywosinski warned industry that it is at risk of losing future investment in LNG, in light of a decline in competitiveness.

Mr Krzywosinski said that while a second wave of investment in Australian LNG has been taken for granted, increasing competition from other exporters threatens any further development.

“We need to recognise there has not been a final investment decision on an Australian LNG development since 2012,” Mr Krzywosinski said.

“As many of us forewarned, including at previous APPEA conferences, the second wave of LNG investment for Australia – which promised to deliver further benefits – is at serious risk of not happening, at least in the foreseeable future.”

Accenture Australia and APAC Energy Lead Managing Director Bernadette Cullinane said that there is $A80 billion worth of value to be captured.

Ms Cullinane added that by 2020, approximately 15,000 km of pipeline is expected to be built in Australia.

APPEA Advisory Board Chair and former Federal Resources and Energy Minister, Martin Ferguson, closed the conference calling on delegates to carefully plan for the future.

“We must strive to be the most efficient and best at what we do,” Mr Ferguson said.

“Our industry has achieved great things.”

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