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Australia’s Victoria State ends onshore conventional gas drilling ban
POLICY
AUSTRALIA’S southern state of Victoria has announced that it will lift its moratorium on con- ventional onshore gas exploration from July 2021.
Victorian Premier Daniel Andrews made the decision to lift the ban – first introduced in 2012 as part of a wider onshore explo- ration moratorium that also prohibited the development of tight, shale, coal-bed meth- ane (CBM) resources – after a three-year investigation by Victorian Gas Program found that the state had gas reserves that could be safely extracted.
The state government has said its ban on hydraulic fracturing and CBM will now become permanent, a legislation change it has been discussing since 2016.
Victoria’s lead scientist Amanda Caples, and the head of the Victorian Gas Program, said the research had shown there could be up to 830 petajoules (21.62bn cubic metres) of conventional gas in both the Otway Basin and Gippsland. Andrews has said any new gas production would be reserved for the
Victorian market, which consumes around 220 PJ (5.73 bcm) per year of gas.
The premier said gas production, which would be conducted under the “high- est of standards”, could generate more than AUD310mn ($186.5mn) per year for regional economies and create 6,400 jobs.
The Victorian Chamber of Commerce and Industry (VECCI) hailed the state’s decision to lift the ban.
“The decision to lift the moratorium is the right one, not only for business owners, but for all Victorians, who in such uncer- tain times cannot afford to be hit with more unnecessary costs,” VECCI CEO Paul Guerra said. “The Victorian govern- ment now needs to work with industry and the federal government to bring more Victorian gas online and to lower energy prices through an integrated and long-term national climate and energy policy.”
By removing the ban on conventional drilling, the Andrews government may have opened the door to an energy deal with the federal government similar to the one the New South Wales government signed in January.
The Australian-NSW memorandum of understanding (MoU) will see the state receive federal funding for energy infra- structure projects in return for boosting gas production for the domestic market by 70 PJ (1.82 bcm) per year. he federal government said at the time that there would be no simi- lar deal with Victoria unless the state ended its ban on onshore gas exploration while also moving to safeguard against sudden power price and supply shocks.™
Oil Search slashes budgets in response to price crash
PROJECTS & COMPANIES
AUSTRALIA-LISTED developer Oil Search has slashed its projected capital and investment expenditure for 2020 in response to falling inter- national oil prices.
International benchmark Brent crude has sunk to four-year lows owing to the coronavirus (COVID-19) pandemic as well as OPEC+’s failure to agree on production cuts on March 6. Brent sunk below $30 per
barrel on March 16 for the first time since early 2016.
Oil Search said on March 18 that it would respond by reducing its expected capex for 2020 by 44% to $200-300mn and its invest- ment spending by 38% to $440-530mn.
While the company will maintain cur- rent production levels at its Papua New Guinea (PNG) projects, it has suspended
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w w w . N E W S B A S E . c o m Week 11 19•March•2020