A new IBISWorld report has listed the oil and gas industry as the country’s highest growth sector for next year.
Despite the overall falling oil price, the survey reveals continued expansion in the energy sector.
“Business information analysts at IBISWorld expect the new financial year to be characterised by the transforming resources boom, continued technological advancement and changing levels of government support for some sectors,” the report stated.
IBISWorld has forecast revenues of $40.271 billion for this financial year, and expects a growth rate of 12.8 per cent year on year, with revenues expected to jump to $45.409 billion for the 2015/16 financial year.
This is a huge increase from the average compound 5.8 per cent growth rate recorded between 2010 and 2015.
“Production growth will be driven by natural gas projects off the coast of Western Australia, including the Gorgon, Wheatstone and Prelude projects; the Gladstone LNG project on Queensland’s Curtis Island can convert coal seam gas into LNG and began exporting in early 2015,” it stated.
“There has been unprecedented capital investment in oil and gas extraction over the past decade, the benefits of which are anticipated in 2015-16,” IBISWorld senior industry analyst Ryan Lin added.
The demand for these will come predominantly from Asia, in particular Japan, as the nation’s energy suppliers move to gas fired plants in the wake of the 2011 nuclear disaster.
“Strong demand from Japan for natural gas will be met by increasing LNG production across Australia. Investment in export facilities will also make the Japanese market more accessible to Australian producers,” Lin said.
“In conjunction with growing production, selling LNG at global prices, rather than the cheaper domestic prices, will provide an additional boost to industry.”
However it wasn’t completely positive regarding the sector’s future, stating that “while the resources boom has provided a foundation for the strong growth anticipated in oil and gas extraction, large falls in investment have the potential to damage industries that service the construction of mining projects”.