As more and more emphasis is placed on deepwater drilling and the economics of developing remote gas resources improve, Australia is predicted to overtake Qatar as the biggest global producer of liquefied natural gas (LNG) by 2017, according to new research.
Analysts at GBI say that domestic and regional demand has spurred Australia to intensify deepwater natural gas production from the country’s abundant offshore reserves, notably to the West.
They point out that deepwater drilling carries huge risk but can be highly rewarding despite being expensive. According to GBI, out of the $1.9billion poured into drilling offshore Australia last year, $1.3billion was sunk into deepwater probes.
GBI forecasts that this expenditure with grow to $2.5billion by 2016, while shallow water expenditure will exhibit minimal growth, increasing by just a few million dollars over the same period.
Australian offshore gas exploration has intensified since 2008, with 72 wells drilled in 2009 alone, since when the effort has increased steadily each year and is expected to reach 153 wells in 2016.
While the primary driver is LNG export, particularly via North West Shelf infrastructure, the Australian government is also actively promoting the domestic usage of LNG as a primary source of fuel for heavy goods transport along its highways, spurring on further investments by creating a consistent demand.
Woodside Petroleum and Apache are the top lease-holders offshore Australia, holding leases for 55 and 53 blocks respectively by last year. Next in line are Santos, Chevron and BHP Billiton, with 27, 25, and 22 blocks, respectively.
For the entire Asia-Pacific region, offshore drilling expenditure is forecast to climb from $16billion last year to $24billion in 2016 of which $14billion is expected to be deepwater-focused.