APPEA | The Voice of Australia's Oil and Gas Industry
The Australian Petroleum Production & Exploration Association is the peak national body representing Australia’s oil and gas exploration and production industry. APPEA’s vision is to achieve a growing and internationally competitive Australian oil and gas industry that makes a vital and sustained contribution to the nation’s economy.
Australia’s liquefied natural gas (LNG) industry is often overlooked for its important role in reducing global greenhouse gas emissions.
In fact, LNG exports from Australia are saving global emissions equal to over a quarter of the country’s total annual domestic greenhouse gas emissions, according to an estimate released with the December 2018 Quarterly Update of Australia’s National Greenhouse Gas Inventory.
“This is a substantial global contribution to be proud of,” said Mr Taylor in a media statement.
This figure represents around 27 per cent of Australia’s total annual emissions and is more than the entire emissions from the Australian transport and waste sectors combined.
So, it’s important for the oil and gas industry – especially Australia’s LNG sector – to be better recognised for its key role in the broader energy debate.
As the global appetite for energy, particularly electricity, continues to grow, the process of substituting LNG for more emissions-intensive fuels allows importing countries to satisfy growing demand while reducing emissions.
When replacing other fuels, LNG can cut help to emissions by around 50 per cent. LNG also helps developing countries, including across Asia, to reduce air pollution, a major cause of millions of premature deaths.
China provides a great case study of the role natural gas, including from Australian LNG, can play in reducing both greenhouse emissions and air pollution. Work by the Oxford Institute for Energy Studies has found that since 2017, natural gas consumption in China has risen sharply as a result of strengthened action against air pollution China has an array of coal-to-gas switching policies and projects underway at a national and regional level. As China’s largest LNG supplier, Australia is playing a key role in these developments.
We must remember that climate change is a global problem that requires a global solution, best delivered through national climate change policy approaches.
A climate policy must be fully integrated and consistent with policies in other areas – including energy, international trade, taxation, economic growth, population, and environmental and social responsibility.
In the long-term, Australia’s LNG projects will deliver decades of economic growth, jobs and exports as well as strong regional and global environmental benefits.
Australia’s LNG export earnings are expected to increase by 62 per cent to $50.2 billion in 2018‑19 and are forecast to reach $52.6 billion in 2019-20, according to figures recently released by the Department of Industry.
More than 70 HSR’s attended the forum, demonstrating a clear commitment to keeping their fellow oil and gas industry workers safe.
HSRs are employees within the offshore oil and gas industry who have been selected or elected to represent a designated work group. HSRs play a valuable role in building safety awareness and help to reduce risks to offshore workers.
The first day of the forum was a pilot HSR refresher training while the second day provided the opportunity for HSR to workshop case studies and discuss challenges and opportunities.
The rights, powers and protections of HSRs and the way they engage in the workplace are described in the Offshore Petroleum and Greenhouse Gas Storage Act 2006.
APPEA Director Environment, Health and Safety Jason Medd said the forum provided an opportunity for health and safety representatives to share knowledge and experiences to improve safety outcomes.
“The oil and gas industry is committed to ensuring our workforce are safe and healthy and our HSRs are empowered to effectively fulfil their key role within their designated work groups,” he said.
“APPEA thanks our member companies for making HSRs available to attend the two-day HSR forum.”
In the first of a new series of APPEA member profiles, explore talks to Queensland-based Arrow Energy about its onshore operations in the Surat and Bowen basins.
Arrow Energy – a coal seam gas explorer, producer, and electricity generator – has been active in Queensland’s Surat Basin since 2000 and commercially supplying gas since 2006.
Since August 2010, Arrow has been a 50-50 joint venture between Shell and PetroChina. The company initially looked like producing Queensland’s fourth, end-to-end CSG-LNG export operation but stepped back from those plans in 2014.
Arrow said this decision left the company free to refine plans and create less expensive projects.
In December 2017, Arrow announced a gas sales agreement with Shell-operated QGC to bring to market about five trillion cubic feet of Arrow’s Surat reserves – making extensive use of existing QGC-operated infrastructure.
“Without the need for Arrow to build the infrastructure itself, it both speeds the Arrow development and makes it less expensive. The arrangement also allows QGC to keep its infrastructure full as its own production matures,” Arrow told explore.
Soil erosion study Theten Farm 2013 (courtesy Arrow Energy).
“Arrow’s tenure is on the eastern edge of the Surat Basin, where it overlaps established farming and grazing activities – including laser-levelled, irrigated, high-production black soil farms. It has supported Arrow’s domgas business to date but the GSA-backed Surat Gas Project is on a different scale altogether.
“That is why the company has put years of effort into de-risking the project – from simple land access rules to developing a planning process that involves farmers, to participating in government-led research into aquifer interconnectivity, to designing wells that suit agriculture.”
At the APPEA 2019 Conference, Arrow highlighted key solutions to one of the biggest challenges of onshore gas – creating a gas project that coexists with established agriculture.
The Conference also showed Arrow’s multi-well pad, deviated drilling that is allowing it up to 2.4km between well pads.
“This allows the pads to be placed at the edges and corners of farmed paddocks to minimise interruption to farming. Ditto for the gathering and support infrastructure,” Arrow said.
Arrow also has tenure in the Bowen Basin, where deeper, tighter, faulted coals present entirely different challenges.
“That, too, is a CSG puzzle that Arrow is solving, piece by piece,” Arrow said.
Australia’s oil and gas industry has noted the Northern Territory Government’s new draft Code of Practice for regulating onshore gas exploration in the Beetaloo sub-basin.
The Code of Practice was released for public consultation on April 4 as part of the Territory Government’s implementation of the 135 recommendations from the Independent Scientific Inquiry into Hydraulic Fracturing.
The draft Code has been developed by technical working groups including the Government’s regulatory inspectors and engineers working closely with CSIRO scientific staff.
APPEA’s Matt Doman said this regulatory process has been measured and was not rushed.
“The industry has lost three years of activity to the moratorium and its resolution, so I don’t think this process has been rushed,” Mr Doman said.
“The priority now is to move forward with gas exploration that will benefit the Territory and provide jobs and investment.”
The industry hopes to start exploration in July this year.
Australia’s oil and gas sector has an unwavering commitment to the highest environment, health and safety standards.
As a result, APPEA received almost 30 submissions from companies and contractors across the four award categories, including:
APPEA’s Environment and Safety Excellence Awards aim to reflect and support the safety and environmental principles and leadership of the oil and gas industry by highlighting outstanding examples of performance.
APPEA Director of Environment Health and Safety Jason Medd said: “Companies that win an APPEA Safety or Environment Award are visible examples of these principles being ‘lived’ and serve as a role model for others in the industry.”
The inclusion of two new project excellence award categories has enabled a broader cross-section of the Australian industry to enter and be formally recognised.
Nominees and winners will be announced at the APPEA 2019 Conference Dinner on 29 May 2019 at the Brisbane Convention and Exhibition Centre.
The first tranche of changes to the petroleum resource rent tax (PRRT) was passed by Federal Parliament on 3 April 2019.
The changes exclude the onshore industry from the scope of the tax and modify the carry forward rates for certain categories of exploration and general project expenditure. The changes effectively apply from 1 July 2019.
The changes follow the government’s announcement in late 2018 that indicated a series of changes would be made to the tax. The recent changes are likely to be the first of three packages of reforms.
The second set of changes relate to a number of technical enhancements to the operation of the tax, while the third will cover the operation of the gas transfer price.
Details on the 2018 government announcement can be found here.
A discussion paper has also been released for public comment on the operation of the gas transfer price – details can be found here.
APPEA has welcomed the re-election of the Berejiklian Coalition Government in NSW and has congratulated the Premier on her election win.
In a letter sent to the Premier this week, APPEA’s Chief Executive Andrew McConville emphasised the importance of onshore domestic gas exploration and production in NSW to create new supply.
APPEA looks forward to engaging constructively on energy policy including with the new Minister for Energy and Environment Matt Kean and Adam Marshall, the Minister for Agriculture and Western New South Wales.
Potential oil exploration in the Great Australian Bight continues to receive significant public attention in South Australia.
APPEA highlighted the benefits and opportunities of exploration in the Great Australian Bight at two forums in Adelaide on March 19.
The first event was a breakfast briefing hosted by the South Australian Chamber of Mines & Energy, which was followed later in the day by the first meeting of the SA Parliament’s Friends of Resources Group.
Both forums featured industry presentations by APPEA and Equinor, the Norwegian company proposing to drill the first well in the Bight since 2003.
APPEA’s SA Director Matthew Doman spoke about the benefits and opportunities that could come from successful exploration in the Bight, while highlighting the industry’s commitment to safe, sustainable operations and genuine engagement with coastal communities and other users of the marine environment.
He highlighted key economic findings from a recent independent report showing how oil exploration and subsequent development offshore would benefit the state and national economies.
Also presenting at the forums was NOPSEMA, the offshore oil and gas regulator. NOPSEMA reiterated the importance of industry recognising community concerns and undertaking effective consultation and engagement.
More than 60 people attended APPEA’s first Connect Series event for the year held in Perth on March 20.
Hosted by KPMG, the event focused on issues facing the global and Australian energy markets and included discussions about emerging trends in oil and gas in Australia and overseas and key risks facing the industry.
The event was headlined by KPMG’s Principal Global Sector Head and US National Sector Leader of Energy and Natural Resources Regina Mayor and featured industry specialist Chevron’s General Manager Major Capital Project Jeff Schmoll.
Some of the major issues discussed at the forum, facilitated by APPEA’s Director of Economics Damian Dwyer, included the rise of the US shale industry, the competitive position of Australia’s oil and gas industry and new development opportunities as well as business models, renewable energy growth and the role of technology and innovation in the global energy market.
Stay tuned for more information about APPEA’s Connect Series, designed for networking and information-sharing, for APPEA members.