Recent announcements of offshore petroleum exploration licenses reflect the sharp downturn in Australia's petroleum exploration investment since 2014.
The most recent trend estimate for petroleum exploration expenditure (offshore and onshore) by the Australian Bureau of Statistics shows another fall by 6.9% to $324.5 million in the September quarter 2016, which compares to over a billion in investment in the same quarter in 2014.
Still, Resources Minister Matt Canavan remains optimistic despite the slowdown in investment.
In February he announced the first cash bid permit awarded since the Government re-introduced a new cash bidding system in 2014 to encourage more effective exploration in relatively mature areas requiring only minimal further exploration.
Chevron paid $3 million for the right to explore an area offshore Western Australia.
“The awarding of this permit is an important milestone and shows that Australia remains an attractive petroleum exploration investment destination", Minister Canavan said.
But the company didn't have much competition in its bid. In fact, of the three cash bid areas on offer, two did not receive any bids and now remain vacant.
And just to show that the Government is not exactly swamped with interest in petroleum exploration right now, for the 13 areas from round one of the 2016 Offshore Petroleum Acreage Release only one bid was received. The remaining 12 areas have now been re-released, and will add to another 12 areas released for round 2 of the 2016 program. All of the areas are located offshore Western Australia and in the Territory of Ashmore and Cartier Islands.
Australia's petroleum future looked somewhat brighter in December last year when Minister Canavan announced nine exploration permits awarded in the 2015 Acreage Release.
The nine permits could potentially result in more than $475 million in exploration investment over the next six years. They are located in Commonwealth waters of the Territory of Ashmore and Cartier Islands and offshore Victoria, South Australia and Western Australia.
Notably, the South Australian permit is in a very contentious area in the Great Australian Bight offshore the South Australian coast. It was received by Karoon Gas Browse Basin Pty Ltd, which plans to undertake seismic surveying and also one exploration well, with the total investment estimated at $117.5 million.
Karoon will now join major oil and gas companies including Chevron, Murphy and Santos in targeting one of the world's last under-explored Cretaceous basins, many of which have great potential as oil and gas provinces.
However, the GAB is also one of the most pristine ocean environments on Earth, and is known for its extremely rough waters. Hence, there is strong opposition from environmental groups against exploration in the area.
Formerly the biggest player in the region, BP, scrapped its plan for a $1.4 billion exploration drilling program at the end of October last year. While the company referred to the current low oil price environment as a main reason for its decision, the retreat was also hailed as a major win for environmental groups which have heavily campaigned against drilling in the GAB.