The Department of Industry, Science, Energy and Resources’ June quarterly report has highlighted the impact final investment decisions (FID) for gas projects will have on production.
In 2019-20, Australian crude and condensate production is estimated to increase by 21 per cent to 412,000 barrels a day, as crude production rises as a result of Woodside’s Greater Enfield project.
The report has outlined that production is forecast to fall slightly in 2020–21 and 2021–22, as output continues to decline at existing fields.
“Beyond the outlook period, the deferral of FIDs for several gas projects may affect future condensate and LPG production, with the production of both commodities typically associated with gas production. In 2018–19, condensate accounted for 57 per cent of total Australian crude oil, condensate and LPG production. LPG accounted for a further 16 per cent,” the report explained.
In recent months, Australian exports have also fallen in both value and volume, as global consumption and prices declined.
With export volumes down by 15 per cent on a quarterly basis, Australian export value in 2020-21 are expected to fall by 24 per cent to $6.8 billion, then recover to $8.6 billion in 2021-22, as the demand increases.
As a result of COVID-19, Australia’s petroleum exploration expenditure decreased by 22 per cent in the quarter, with the decline largely drive by falls in Queensland (down $32 million) and Western Australia (down $15 million).
However, the report explained that earnings, export volumes and export earnings, as well as global production and consumption have all been revised down.
In addition, the Department has forecast oil prices to increase in the second half of the year, but still remain low as the COVID-19 pandemic limits global consumption.
“However, once the impacts of COVID-19 on global oil consumption ease, established OPEC+ production targets out to April 2022 are likely to drive global prices higher,” the report outlined.