QRC Chief Executive Michael Roche said the pain of cost cutting has paid dividends for many companies in the sector, with the oil and gas industry being the more positive story.
“Compared with a year ago, Queensland now has 20 per cent of oil and gas operations in the bottom 23 per cent of global costs and 60 per cent in the bottom two quartiles”? Mr Roche said.
“The softening of the Australian dollar, with most contracts negotiated in American dollars, has also assisted our sector.
“However, it shouldn’t be forgotten that, at current spot prices, 43 percent of Queensland’s thermal and 5 percent of coking coal production is loss-making.”?
The report adds that eastern Australian gas prices are not expected to ease over the coming months as the ramp up of the Queensland Curtis LNG (QCLNG) Project, combined with the impending start-up of the Australia Pacific LNG (APLNG) and Gladstone LNG (GLNG) projects, maintain pressure on gas supply.
Additionally, while the industry is yet to return to the situation in 2008 when all Queensland operations were in the bottom two quartiles, as the LNG projects move out of construction and into operations, there are signs that these operations will move down the global cost curve.