Australia The Future for Oil and Gas

Transcription

1 Australia The Future for Oil and Gas Philip Aiken President and CEO BHP Billiton Petroleum Asia Pacific Petroleum Conference Singapore, September 2003

2 Australia historical production MMboe Gippsland Fields Barrow Island Fields Production profiles of individual Australian fields and cumulative production forecast at 50 per cent probability derived from industry data. Source: T Powell AGSO 2001, ABARE

3 Australia production vs consumption Consumption MMboe Gippsland Fields Barrow Island Fields Condensate Oil Production profiles of individual Australian fields and cumulative production forecast at 50 per cent probability derived from industry data. Source: T Powell AGSO 2001, ABARE

4 Australia some future liquids developments Field name Product Liquids reserves Startup Gorgon Gas/condensate 316 MMbbl 2009 Mutineer/Exeter Oil & Gas 120 MMbbl 2006 Stybarrow Oil & Gas Appraisal 2006 Enfield Oil & Gas 43 MMbbl 2005 Cliff Head Oil 25 MMbbl 2005 Yolla Gas/condensate 24.5 MMbbl 2004 Kipper Oil & Gas 13 MMbbl 2006 Egret Oil 11 MMbbl 2005 Source Wood Mackenzie, Nov 02.

5 Global Prospectivity world undiscovered oil Sub-Saharan Africa & Antartica US Central & South America Middle East & North Africa North America (excl U.S.) Europe Australia <1% of World Oil Former Soviet Union Asia Pacific (excl Australia) Source: USGS

6 Global Materiality Increasing Political Risk Australia not a place to rush to for oil UK Brazil Nigeria Russia Australia Angola Fiscal Terms Increasingly Onerous Size of the button reflects average discovery size (MMboe, ) Source: IHS Energy Group/Wood Mackenzie Pakistan Colombia Turkey China US Libya Algeria Norway Indonesia

7 Australia maturity in shallow waters Reserves Additions ( MMboe) Oil & Condensate Oil Wells Number of Wells per Year

8 Australia activity in maturing areas Shallow water basins are well explored Infill exploration close to infrastructure will continue new technology application (3D seismic) incremental reserves New plays in existing shallow water eg. Enfield area in WA-271-P But these are unlikely to yield material quantities of hydrocarbons

9 Australia the potential of frontier basins Browse/Beagle Townsville Trough South West WA s Lord Howe Rise Great Australian Bight Deepwater Bass Strait

10 Australia oil Trends in industry: Declining liquids production Industry focus is diverging - Minors focus on mature areas, generally smaller prizes - Majors focus on larger opportunities Australia regarded as maturing, and lacking prospectivity Some untested frontier areas, mainly offshore Responses: Funding for technical data Review of fiscal terms

11 Australia history of gas production Export PJ Domestic Includes: Gippsland, Cooper, Carnarvon, and other Source: AGA

12 Gas consumption by State* Northern Territory 800 PJ 600 Queensland South Australia Western Australia Victoria 0 New South Wales * Includes ethane, non-commercial natural gas and methane produced from other than natural gas fields. ** Includes ACT. Source: AGA

13 Australia progressive inter-linking of markets Timor Sea Qld PNG 10 Years Ago Bass Strait gas sold in Victoria SA Cooper NSW Proposed Pipeline Cooper sold in NSW & South Australia Now Eastern Gas Pipeline SeaGas Pipeline Minerva Vic EGP Bass Strait Tasmania supply - July 2002 South Australia pipeline to be completed by 2004 TGP Other interconnection proposals Timor Sea & PNG discussion

14 Australia domestic gas Trends in industry: Continuing increase in number of upstream suppliers New gas supply source likely to be required for SE Aust. ~ 2010/15 - Including necessary transmission pipeline investment Gas pipeline network growing without Govt. sponsorship/incentives Emerging role of coal bed methane - Level of ongoing investments dependant on supply experience and available market Continued retail and pipeline consolidation Gas market remaining relatively immature and shallow

15 Australia gas resources 37 KPJ Browse Bonaparte 27 KPJ Carnarvon 82 KPJ Perth Amadeus 6 KPJ Eromanga Cooper Bowen Surat Remaining Reserves (AGA 2002) (Commercial 37 KPJ) Production KPJ Otway 8 KPJ Gippsland Bass

16 Major Gas Trade Movements Trade flows (billion cubic metres) USA Canada Mexico Sth & C America Europe Former Soviet Union Middle East Africa Asia Pacific Natural Gas LPG Source: BP Statistical Review of World Energy 2002

17 LNG continues to grow BCM Atlantic Asia-Pacific Source: Poten Partners

18 LNG world imports, 2002 (million tonnes) Europe 17.6 Japan North & South America 5.2 Korea 5.1 Taiwan Source: ABARE

19 LNG supply to Asia, 2002 (million tonnes) 1.2 USA UAE14.9 Qatar 4.8 Oman Malaysia Brunei Indonesia 7.3 Source: ABARE Australia

20 LNG Asian demand projections (million tonnes per annum) Korea China Taiwan Japan Source:ABARE India high

21 LNG capacity expansion plans 150 Mt/pa Projected demand Projected new capacity Existing capacity Source: ABARE

22 LNG market dynamics Trends in industry: Fierce producer competition is lowering prices and margins Cost base of liquefaction is reducing LNG moving to commodity status in global market New LNG markets slow to materialise US emerging as a market Around 2010, expect another Australian producer of LNG other than NWS

23 Summary Australia will need to compete for exploration dollars Domestic gas market is immature but developing Australia positioned to supply growing LNG market