A move by Norwegian government-backed Equinor to withdraw from oil and gas exploration in the Great Australian Bight has been labelled disappointing by industry groups, and welcomed by environmentalists.
A move by Norwegian government-backed Equinor to withdraw from oil and gas exploration in the Great Australian Bight has been labelled disappointing by industry groups, and welcomed by environmentalists.
Equinor had planned to drill the Stromlo-1 well in the Ceduna sub-basin, off the coast of South Australia, but concluded the project would not be commercially competitive.
It follows the withdrawal of BP from the bight in 2016.
Equinor’s environmental plan was given the green light by the National Offshore Petroleum Safety and Environmental Management Authority in December.
“The approval of the Stromlo-1 exploration well environment plan confirmed our ability to safely operate in the bight,” Equinor country manager Jone Stangeland said in a release.
“However, Equinor has decided to discontinue its plans to drill the Stromlo-1 exploration well, as the opportunity is not commercially competitive.
“We will engage with the federal and state authorities regarding our decision to discontinue the exploration program.
“We hold an exploration permit offshore Western Australia and will maintain other ongoing interests and activities in Australia.”
Australian Petroleum Production and Exploration Association director South Australia Matthew Doman said the project would have delivered jobs to the state.
“A 2018 study by ACIL Allen found successful oil exploration in the Great Australian Bight could see the creation of more than 2,000 jobs in South Australia and generate over $7 billion in average annual tax revenue to federal and state governments over the next four decades,” Mr Doman said.
“Successful development could also boost our energy security.
“Australia’s oil production has fallen significantly over the last 10 years, and we now import over 80 per cent of the oil we use.
“While our energy mix is changing, all credible analysis shows Australia will use a lot of oil and gas for decades to come.
“The proposed exploration activity had been subject to an extreme campaign of false and exaggerated claims that deliberately overstated the risks and ignored the potential benefits.
“Of course, any exploration and development have to be done in an environmentally safe manner.
“We have to make sure there’s no negative impact on existing industries or coastal communities, and the industry remains committed to that.”
EnergyQuest chief executive Graeme Bethune agreed it was disappointing.
“In our view, the decision is likely to have been driven by stronger carbon reduction targets of the European oil companies,” Dr Bethune said.
“Earlier this month, Equinor announced it would include Scope 3 in its emission reduction target- 50 per cent cut in net carbon intensity by 2050.
“Carbon costs are starting to bite and the European companies appear to be setting higher hurdles for oil projects than gas.
“For example, OMV sold out of Tui in NZ in the past quarter because it said it was shifting away from oil.
“Repsol in December announced a $US5.3 billion write-down, reflecting lower values it sees for oil and gas, and said it would redirect investment into renewables.
“It has set a net zero target by 2050, and BP has since followed.
“Repsol didn’t appear to single out oil, but the logical conclusion is oil would be at the top of the reject list because of its higher carbon intensity.
“This is another example of European influence on investment globally, similarly to the decisions by the European Investment Bank to no longer invest in fossil fuel projects in developing countries and the decision by the Swedish Central Bank to no longer invest in bonds issued by the Alberta, Queensland or WA governments.”
Wilderness Society South Australian director Peter Owen welcomed the news.
“The Wilderness Society welcomes Equinor’s decision to responsibly withdraw from the marine wilderness that is the Great Australian Bight," Mr Owen said.
“It’s been a while coming, but the right decision is the right decision and we have no doubt that the hundreds of thousands of people that have supported the campaign to Fight for the Bight will be both delighted and relieved to hear this news.
“We’ve worked tirelessly alongside the community to ensure that the Bight can be protected from irresponsible fossil fuel exploitation.
“Four major oil companies have now left the bight since the Fight for the Bight began.
“It’s clear that drilling the bight is not a sensible proposition.
“Opening up a new high-risk frontier oil field when we are hurtling towards catastrophic climate change is madness.
“We are now calling on the Australian government to listen to the people and permanently protect the unique waters of the Great Australian Bight from drilling for good.”
