A review of the petroleum industry’s exploration and appraisal activity offshore and onshore Australia for 2023. Topics to be covered include petroleum exploration and GHG assessment license round releases and awards, drilling and seismic acquisition. Key wells, discoveries and activities will be highlighted and discussed in addition to relevant transactions.

Geopolitical uncertainty remained high in 2023 with Israeli actions in the Gaza strip, the continuing war in Ukraine and tension between China and several neighbouring countries. However, global inflationary pressures, surprisingly, eased during the year, and the prospect of a global recession faded from where it had been in 2022. In Australia continued activism around climate change issues, has impacted project developments and sentiment in the industry remained subdued. The Petroleum Exploration Society of Australia (PESA) Year in Review Development and Production review looks back at the oil and gas production and development activities in Australia in 2023 providing historical context and trying to understand future implications for the industry.
LNG production in Australia remained close to record high levels although, not without problems. Both the Scarborough/Pluto 2 LNG project and the Barossa project continued to have legal and approval hurdles resulting in suspension of some execution activities. Elsewhere other projects continued with their plans, including the Kipper field in the Gippsland Basin, the Crux project in the Browse Basin and the Walyering project in the Perth Basin which was brought online in September 2023. The domestic markets continue to have unique issues with major concerns about gas supply in the East, stalled developments and failing supply in the Northern Territory, and a renewed ban on any exports (including to other states) of gas from Western Australia.

The world has pledged to deliver a pathway to Net Zero emissions by 2050, however 2023 saw an increase in the local and global headwinds challenging its delivery, including geopolitical factors, global economic variables, advancing technology and evolving policies and regulations. Whilst global new investment in renewable energy skyrocketed to $358 billion in the first six months of 2023, a 22% rise compared to the start of last year and an all-time high for any six-month period, it has fallen short of the 76% rise needed to deliver a Net Zero 2050 pathway. Simultaneously, sustained high oil, gas and coal prices driven by the effects of geopolitical uncertainty and the Russia-Ukraine and Middle East conflicts, have led to major energy companies tempering their energy transition goals as they chase higher returns from traditional fossil fuel projects. This pivot also underpinned some of the largest proposed mergers and acquisitions in the market, as companies seek to consolidate greater scale, concentrate exposure to LNG markets globally and expand into critical mineral supply chains. As the world, and Australia, attempts to deliver on ambitions to decarbonise, the sector continues to grapple with the short and medium term need to provide reliable, affordable and secure sources of energy, which may require the greater use of fossil fuels for longer than pledged Net Zero pathways have considered.