Pre-recorded comments to the 2021 APPEA conference, Perth
View the video: APPEA Connect - Minister Pitt's address.
Thank you to Andrew McConville and his team for bringing the industry together again following a challenging 2020.
I’m sorry I can’t be there in person, but I am still very pleased to be part of the oil and gas industry’s premier annual event.
Yesterday, to coincide with the opening of this conference, I was delighted to announce the 2021 offshore petroleum exploration acreage release.
This is a central component of the government's strategy to promote and encourage investment in petroleum exploration.
Ongoing exploration is key to ensuring Australians have access to reliable and affordable energy.
It also means we’re well placed to meet the demand for gas from our overseas trading partners.
The COVID pandemic has obviously had an impact on the industry, and plans for exploration more generally.
However, I was encouraged by the interest in the 2019 acreage release, with 10 exploration permits awarded to date.
This could result in more than $450 million in investment to explore the Bonaparte, Northern Carnarvon and Gippsland basins over the next six years.
On the issue of COVID, I’d like to take this opportunity to thank the oil and gas industry for rising to the challenges faced during the pandemic.
The resilience the sector showed wouldn’t have been possible without the significant effort put into collaboration with government agencies, regulators, the workforce and other companies.
I also want to commend the industry on its commitment to workers’ safety.
The implementation of infectious disease management plans and quarantine arrangements, under frequently changing circumstances, made a significant difference.
Your peak body - APPEA – showed leadership and played an integral role, developing protocols for the movement of onshore and offshore workforces and supporting the government’s COVID-19 vaccine strategy.
I know that this past year has also had an impact on the workforce and their families.
Fly-in fly-out work already presents a range of hurdles, and the adjustments these workers have had to make during the pandemic has added to the challenges.
I thank the workforce for its resilience in these difficult times and commend the industry for its leadership on this issue.
In collaboration with Safer Together, APPEA and the oil and gas industry developed the COVID-19 Wellbeing Framework to help protect mental health and promote wellbeing.
It promotes the significant role that supervisors, managers and executives play in creating a culture that supports mental health.
And I probably don’t need to remind you that, against the challenging backdrop of COVID, Australia’s resource and energy export earnings hit a record high of $291 billion in 2019–20, and this financial year we expect exports will exceed $300 billion.
It’s a remarkable turnaround when you consider that in December, official forecasts were suggesting they’d be as much as $50 billion lower.
It’s an amazing achievement and highlights the long-term success and strength of Australia’s resources sector – and the important contribution of everyone who works in the industry.
Ongoing exploration is important to providing a steady supply of energy for the future.
The government has to date invested $225 million in Exploring for the Future.
The program is uncovering vast new areas of Australia to help identify new energy resources for exploration and development.
A key aspect of the government's gas fired recovery, $28.3 million has been allocated in the 2020-21 Budget to develop five Strategic Basin Plans.
These plans unlock and accelerate the development of our vast gas reserves to increase domestic supply and lower prices for households and businesses.
The first plan developed, the Beetaloo Strategic Basin Plan, fast-tracks access to a world-class resource that has the potential to drive significant development in Northern Australia.
The $50 million Beetaloo Cooperative Drilling Program, a key part of the plan, will support operators to speed up their exploration and bring Beetaloo gas online faster.
The program remains open to new applications.
The next plan to be released will focus on the North Bowen and Galilee Basins in central Queensland.
We know that the Bowen Basin is a major coal producing area but it also has immense potential for gas.
So, through this year’s Budget, we will deliver:
- $15.7 million to crack complex geological challenges and establish cost-effective gas flows within the basins, and
- $5 million to progress pipeline pre-feasibility work to connect these basins to future markets.
I am also pleased to announce that the next Strategic Basin Plan will cover the Cooper and Adavale basins across South Australia and Queensland.
The Cooper Basin is well known and regarded as an established onshore oil and gas producing basin.
The Adavale Basin has untapped potential.
Both are close to existing infrastructure and to the east coast market, making them natural choices.
The government’s $20 million Global Resources Strategy will diversify and strengthen Australia’s access to key export markets, and reduce the risk of trade disruption.
Through the Global Resources Strategy, the government:
- will strengthen our resources exports by diversifying where we do business, and
- will work more closely with our global trading partners to identify energy, metals and mineral needs and build strong and stable supply chains which are resilient to global trade challenges.
2021 Acreage Release
Exploration continues to play a key role in helping our economy recover from the pandemic.
That’s why I am pleased to have announced that 21 areas, covering around 80,000 square kilometres in the Bonaparte, Browse, Northern Carnarvon, Otway, Sorell and Gippsland basins, are being released this year.
This release will help attract more exploration programs and open up new developments, creating new jobs and stimulating economic growth.
In focus for the 2021 release is the Otway Basin, a gas producing basin which is in close proximity to existing infrastructure and projects, and has the potential to increase energy security on the east coast.
The government also continues to provide ready access to thousands of terabytes of open file data via the online National Offshore Petroleum Information Management System.
And Geoscience Australia is providing access to a wealth of new pre-competitive data sets and petroleum geological information in support of the annual release of offshore acreage.
Australia’s climate commitments – ‘meet and beat'
The Australia’s Emissions Projections 2020 report shows we are on track to beat our 2030 target by 403 million tonnes.
The projections confirm that Australia’s approach to use technology, not taxes, will continue to drive down emissions.
Together we can make the most of oil and gas resources – providing secure and affordable energy and playing to the strengths and competitive advantages of our nation.
CCS and Greenhouse Gas Acreage Release
To help industry practically meet these targets, I am pleased to announce that nominations are now open for areas to be included in an offshore greenhouse gas acreage release.
This release will also support the recently announced government initiatives to accelerate the deployment of carbon capture, use and storage including:
- $264 million to support the development of CCS/CCUS projects and hubs – building on the existing $50 million Carbon Capture, Utilisation and Storage Fund
- an Emissions Reduction Fund method for CCS, expected in the third quarter of this year, and
- broadening of ARENA’s remit to support early-stage R&D and innovation funding for CCS and CCUS projects going forward.
Gas accounted for 41 per cent of manufacturing energy use in 2018 19.
Access to secure, reliable and affordable gas is key to the long term competitiveness and viability of these important domestic industries.
Continuing to develop large offshore resources is critical for allowing the Australian LNG industry to maintain production, remain globally competitive and continue to generate valuable export earnings.
The Scarborough and Barossa projects were awarded petroleum production licences in 2020.
It is notable that across the world, activists rail against gas and LNG projects but demand from our trading partners in Asia continues to grow.
Qatar is about to undertake a major expansion of its export capacity to around 110 million tonnes and capacity is growing out of the US.
This is not a story of exporters overbuilding or a national competition but demonstrates the strong demand for LNG that is going to continue for decades.
And Australia plans to remain at the forefront of the LNG sector
Continued criticism from green activists of the industry ignores the fact that resources development in Australia is carried out safely and responsibly, and that Australia’s economy was built off the back of the resources sector.
I continue to encourage you to put the facts out to the Australian people regarding this important industry.
Facts about how much the industry contributes to the economy.
Facts about how many workers rely on the industry and facts about how it will leads Australia’s recovery from the economic impacts of COVID-19.
And indeed facts about the activists campaigns – the spotlight should be on those organisations for a change.
For example, Greenpeace raised more than 18 and a half million dollars in donations and bequests and $1.1 million in Government grants in 2019-20 in Australia alone.
Nearly 25 per cent of expenses related to fundraising and 39% were in staff costs – so rather than protecting the environment they are mostly focussed on protecting themselves.
It’s clear that the courts and bureaucratic processes are being used by green activists to delay major projects and potentially cripple companies.
The withdrawal of some financial institutions and insurance from the sector is concerning, which is why I am pleased that the resources sector will be a key focus on the Trade and Investment Growth Committee’s inquiry into the financial sector’s treatment of Australia’s export industries.
The committee will inquire into and report on the approach and motivations of our financial institutions regarding their investment in Australia’s export industries.
The requirements for the offshore oil and gas sector must remain world-leading practice to manage an increase in decommissioning activities over the next 30 years.
The government has announced an enhanced framework to make sure the right regulatory safeguards are in place for the decommissioning of oil and gas projects.
Implementation is underway – the first step to reduce potential risks is the Bill that I introduced into Parliament on 26 May 2021.
This Bill contains measures to increase government oversight of changes in company control, improve decision-making criteria and enhance the trailing liability provisions in place to apply in a great range of circumstances.
And industry has a key role to play.
The recently launched Centre for Decommissioning Australia (CODA), is a much needed, industry-led initiative, established by the NERA Growth Centre.
CODA is the platform through which industry can collaborate and share its knowledge and expertise.
I encourage the industry to get behind CODA so the industry can decommission projects while still delivering benefits to the environment and jobs to local service and technology companies.
This year’s acreage release presents strong investment opportunities.
I encourage the sector to submit work program bids before the closing date of 3 March 2022.
I want to ensure Australia remains an attractive destination for exploration investment and, most importantly, that we deliver long-term energy security for all Australians.
Thank you – and enjoy the conference.