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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2016-03-22 Daily Xml
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Oil and Gas Sector

The Hon. T.R. KENYON (Newland) (14:52): My question is to the Minister for Mineral Resources and Energy. Can the minister update the house on South Australia's track record in offshore oil and gas exploration and any changes to the outlook for this sector of the economy?

The SPEAKER: Is the minister able to help us?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:53): Sir, I will endeavour to do my best. Thank you, Mr Speaker, and I thank the member for his question and his keen support for this state's oil and gas sector. As you know, sir, South Australia is already the nation's—

Mr Pengilly interjecting:

The Hon. A. KOUTSANTONIS: Yes, we are on a unity ticket, you and I. We are the nation's largest onshore oil producer. This year marks the 150th anniversary of oil and gas exploration in South Australia. Back in 1866, the still young colony of South Australia sank its first exploratory wells adjacent to the Otway Basin in search of oil. Our ambitions have grown within our state, and spending on petroleum exploration in South Australia totalled more than $330 million in 2015 in what was a challenging year for the oil and gas industry.

While the Cooper and Otway Basins in our South-East have a long history of exploration and production, sites are now turning again to what is regarded as one of the world's last underexplored basins. While it is true to say that South Australia's offshore areas have only been lightly explored for oil and gas, it is only recently that technological advances have enabled the state's offshore potential to be seriously explored. That's why, half a century on from the first offshore survey in South Australia, the Bight Basin off the coast of the Eyre Peninsula is now attracting some of the world's major oil and gas companies.

Companies like BP, Chevron, Statoil, Murphy Oil and Santos have collectively committed to spend about $1.2 billion on programs to target oil and gas. A further $1.1 billion could be spent, depending on the initial results of these exploration campaigns.

The first cab off the rank is BP Australia, along with its joint venture partner, Norway's Statoil. BP is currently working its way through the assessment and approval process for its proposed drilling program with the regulator, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). Initially, that 1,200 page environmental plan submitted by BP in October last year did not yet meet the criteria for acceptance under its regulations.

I have seen this determination characterised as a rejection of the environmental plan: it is not. That is not the case. NOPSEMA's assessment is a process of feedback and responses and, as such, BP is required to be given a reasonable opportunity to modify and resubmit its environmental plan. BP has done so, and resubmitted its environmental plan on 15 March. NOPSEMA will now resume its assessment of this detailed plan against the requirements of the environmental regulations.

Even as BP works its way through this process, South Australia is witnessing some of the economic benefits of having an offshore exploration campaign based here in our state. About 1,000 companies across various industry sectors have already registered an interest in participating in BP's Bight program. These opportunities relate to supply vessels and aircraft as well as a range of services such as logistics, warehousing, and medical and catering services, all of which are required to support this project.

I encourage companies to register their interest to supply for the BP project through the designated web portal on the Industry Capability Network Gateway website. I urge members opposite who have their reservations about the oil and gas industry, which is probably all of them, that this is actually a very good industry that they should support.

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