Domestic oil production hits 42-year low

Australian domestic oil production has sunk to a 42-year low, suffering a 18.9% drop in 2011.

A report released by EnergyQuest, an Australian energy advisory firm, says production of condensate, LPG and LNG are also lower and domestic gas production is flat.

“The biggest contributor to the production decline was the drop in oil production to 92 million barrels,” said EnergyQuest chief executive officer Dr Graeme Bethune said in a statement.

Australian petroleum production (oil, LPG, condensate and natural gas) fell to 488 million barrels of oil equivalent (MMboe) in 2011, down from 519 MMboe in 2010.

“Production was down across all three of the basins that produce over 80% of Australia’s petroleum: the Carnarvon Basin offshore Western Australia and the Gippsland and Otway basins offshore Victoria,” Bethune said.

“The only basins with higher production for the 12 months were the Cooper Basin in South Australia, the Surat-Bowen basins in Queensland and the Bass basin offshore Tasmania and in each of these cases the increase was less than 1 MMboe.”

Bethune noted that one oil facility had shut down for redevelopment between March and September.

“While this will boost Australia’s oil production in 2012 – and Apache, ExxonMobil, PTTEP and Santos also have oil field developments coming online over the next couple of years – the long-term trend is for our oil production to continue to decline in the absence of major new discoveries,” he said.

According to The Oil and Gas Journal (OGJ), Australia had 3.3 billion barrels of proven oil reserves on January 1, 2011. Australian crude oil is typically low in sulfur and wax, and therefore of higher value than heavier crudes.

Western Australia has 64% of the country’s proven crude oil reserves, as well as 75% of condensate and 58% of LPG.

According to the Australian Institute of Petroleum the national average petrol retail price rose by 1.3 cents to 147.1 cents a litre in the past week. CommSec economist Savanth Sebastian today released a report tipping a 2-3 cent rise in pump prices over the next fortnight.