Australia: Oil industry wants more searches
Learn Monday 24 March 2003, 12:30 PM
Australia would find itself with severe oil and gas shortages in the next decade if billions of dollars were not invested in exploration, a key industry body said.
The Australian Petroleum Production and Exploration Association (APPEA) said $14.5 billion was needed to discover and develop oil and gas fields in Australia to replace depleting supplies in Bass Strait.
Another $20 billion was needed if Australia wanted to find enough oil and gas to be self-sufficient, said APPEA executive director Barry Jones.
"We have to either make it more attractive to invest, or make it safer to import from overseas," Mr Jones said.
"The Australian government will have to help to do both.
"The idea that somehow we might be able to attract $35 billion of new capital in Australia in the next 12 years to take us from the lowest supply curve to the demand curve is pretty close to impossible, so we are going to have to import.
"To import you have to make it safer, with less political risk."
Mr Jones said increased investment and safe trade links required the government to stop "tinkering" with ethanol and renewable energy issues and focus on ways to improve exploration, tax and foreign policy.
The government needed to simplify the exploration approval process, cutting down on environmental and native title bureaucracy, he said.
It had to realise the tax regime was not set in stone and make changes to ensure exploration, development and production of Australian reserves were competitive with areas such as the Gulf of Mexico and the Caribbean.
And it had to review its foreign policy, to secure increased trade with the Middle East.
Mr Jones said capital in the oil and gas industry would be spread thin in the years ahead as oil companies injected money into clearing up trouble spots such as Venezuela and Iraq after the war.
While Australia was 40 per cent self sufficient in oil, it imported 40 per cent of its supply from Asia and 20 per cent from the Middle East.
More attention would have to be paid to the Middle East region if Australia wanted to ensure long-term secure supply, Mr Jones said.
"Our foreign policy needs to take into account our long-term liquid energy needs," he said.