Australia Oil and Gas Upstream Market Size, Share and Growth Analysis Report: Forecast Trends and Outlook (2024-2032)

Australia Oil and Gas Upstream Market Trends

Sustainability and environmental responsibility are two significant emerging trends in the market. In response to the new approach of sustainability and accountability for environmental results, more companies adopt environmentally friendly methods, which include the application of sophisticated technologies to reduce emissions and increase efficiency in exploration and production activities, thus shaping new trends in the Australia oil and gas upstream market. A further trend is the emphasis on the integration of CC to achieve the minimum impact on the environment. This, therefore, is pressured both by regulatory forces and by the fact that consumers increasingly want cleaner sources of energy, such that operators have to innovate within the confines of economic viability and environmental stewardship in their operations.

Australia Oil and Gas Upstream Market Growth

Rising global energy demand is a strong driver of Australia’s oil and gas upstream market, projected to increase by 1.3% annually through 2040. This demand, fueled by population growth and industrialization, particularly in Asia-Pacific countries, prompts significant investment in exploration and production activities, thus augmenting the growth of the Australia oil and gas upstream market. In 2022, Australia's oil and gas exports reached AUD 56 billion, underscoring the sector's importance to the national economy. Furthermore, government support for new projects and the push for energy security incentivize exploration efforts, creating a robust environment for upstream investments.

Australia Oil and Gas Upstream Market Insights

• Midstream projects will account for approximately 47% of all oil and gas projects in Australia by 2025, with pipelines leading.
• The Amadeus Basin–Moomba gas pipeline, a key midstream project, spans 950 kilometres and is currently in the FEED stage, thereby pushing the Australia oil and gas upstream demand. 
• Upcoming petrochemical projects include Leigh Creek Urea Plant and Karratha Urea Plant, each with a capacity of 2.00 mtpa.

Industry News

October 2024

The Dorado oilfields, located off Australia’s coast, are set for revitalization after a two-year hiatus. Major services companies are being notified as contractors are approached for the development of the offshore platform.

March 2021

Australia's energy player Santos awarded the contract to BW Offshore for building, hook-up, and operation of an FPSO for its Barossa gas field project off Australia. The firm period contract was valued at around AUD 4.6 billion.

Australia Oil and Gas Upstream Market Drivers

Technological innovation, including automation and enhanced recovery methods, will drive upstream market growth.

Technological innovation is a factor that will most probably push the growth of the oil and gas upstream market in Australia in the coming years. Technological advances in the methods of exploring and producing oil and gas such as EOR, as well as data analytics enhance efficiency and reduce costs to run operations, thus propelling the Australia oil and gas upstream market growth. With the increase in automation and use of artificial intelligence, work done during drilling is rendered safer and more efficient. With these innovations, companies unlock previously untapped reserves while maximising the use of current production, thus creating a boom in the overall sector. This technological advancement will have better sustainability and competitiveness with a changing energy scenario.

Opportunities in the Australia Oil and Gas Upstream Market

Untapped offshore reserves and natural gas exploration present significant growth opportunities in Australia.

Drilling new, untapped offshore reservoirs due to the rapid advancements of drilling technology in addition to the enhancement in the quality of seismic imaging brings vast prospects for creating value upstream in Australia. An enhanced interest in natural gas also creates greater future opportunity investment in the exploration and gas production industry. This shift provides not only energy security but the complementary movement of the entire world towards cleaner energy-creating opportunities for new project development and partnerships.

Market Dynamics

A promising new technology being explored in Australia’s oil and gas upstream market is digital twinning. This innovation involves creating virtual models of physical assets, allowing companies to simulate operations, predict maintenance needs, and optimise production processes in real time, thus propelling the Australia oil and gas upstream market dynamics and trends. By integrating data from sensors and advanced analytics, digital twinning enhances decision-making and operational efficiency. This technology not only reduces downtime and operational costs but also improves safety by enabling proactive maintenance and risk management, making it a valuable tool for modernising the industry.

Market Restraints

Increasing regulatory pressure poses a significant restraint to Australia’s oil and gas upstream market, as governments implement stricter measures to reduce carbon emissions and combat climate change. These heightened regulations can lead to increased compliance costs and longer approval timelines for new projects, leading to Australia oil and gas upstream market challenges. Additionally, public opposition to fossil fuel developments, driven by environmental concerns, may result in delays or cancellations of projects. This challenging regulatory landscape can deter investment and slow exploration and production activities, ultimately impacting the sector’s growth prospects in the coming years.

Australia Oil and Gas Upstream Industry Segmentation

The EMR’s report titled “Australia Oil and Gas Upstream Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Oil and Gas Wells Drilling Services
• Crude Oil
• Oil And Gas Supporting Activities
• Natural Gas

Market Breakup by Drilling Technology

• Unconventional
• Horizontal Drilling
• Others
• Conventional
• Vertical Drilling
• Others

Market Breakup by Production Site

• Offshore
• Onshore

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Oil and Gas Upstream Market Share

By Type

Rising global energy needs and investment drive demand in Australia’s oil and gas market.

Demand in Australia’s oil and gas upstream market is bolstered by a combination of rising global energy needs and the country's rich natural resources. As per Australia oil and gas upstream industry analysis, increased investments in oil and gas wells drilling services support exploration efforts, while a growing focus on natural gas aligns with global shifts towards cleaner energy sources. Additionally, the revival of crude oil production, coupled with expanding oil and gas supporting activities, enhances operational efficiency and capacity. This multifaceted demand landscape positions Australia as a key player in the energy market.

Market Analysis by Drilling Technology

Unconventional, horizontal, and conventional drilling technologies are optimising resource extraction in Australia.

In Australia, various drilling technologies are gaining traction to enhance efficiency and production. Hydraulic fracturing is an unconventional method that is used more frequently to access reserves that cannot be reached by conventional drilling. As per Australia oil and gas upstream market analysis, horizontal drilling has longer reach with improved resource extraction with lesser surface impact. Conventional techniques are necessary for fields already established and will have a consistent production output. While it is an old-fashioned method, vertical drilling can still be very beneficial when it comes to applications in relatively shallow reserves. As such, progress in the technologies nurtures innovation and optimal use of resources in the oil and gas industry in Australia.

Production Site Analysis

Offshore and onshore production sites enhance Australia’s oil and gas sector demand significantly.

Both offshore and onshore production sites are significantly bolstering demand in Australia’s oil and gas sector. Offshore sites offer access to vast reserves of oil and gas, particularly in regions like the Northwest Shelf, driving substantial investments in exploration and infrastructure. These sites often yield higher production rates, enhancing energy security. Conversely, onshore sites are becoming increasingly efficient due to advancements in drilling technologies, such as horizontal drilling and hydraulic fracturing. The combination of these two site types allows for diversified supply sources, meeting both domestic and international energy needs effectively.

Australia Oil and Gas Upstream Market Regional Insights

New South Wales Oil and Gas Upstream Market Regional Insights

New South Wales is witnessing a growing interest in its oil and gas upstream market, driven by emerging projects and increased exploration activities. The state has an estimated 5.3 trillion cubic feet of gas reserves, attracting investment in natural gas development. Recent initiatives, including the assessment of unconventional gas resources, aim to enhance production capacity. Furthermore, the government’s commitment to sustainable energy practices is fostering a balanced approach to resource development, positioning New South Wales as a key player in Australia's energy landscape.

Victoria Oil and Gas Upstream Market Analysis

Victoria oil and gas upstream market is characterised by a focus on natural gas production, particularly from the Gippsland Basin, which hosts significant reserves. Companies like Beach Energy are actively engaged in exploration and production, contributing to the state's energy supply. Recent advancements in technology and government support for sustainable practices are driving investment in the sector. Additionally, Victoria's commitment to reducing emissions encourages the development of cleaner energy sources, positioning the state as a critical player in Australia's transition to a low-carbon future.

Queensland Oil and Gas Upstream Market Trends

Queensland's oil and gas upstream market is experiencing significant growth, particularly in natural gas production. The state is home to approximately 23 trillion cubic feet of proven gas reserves, making it a key player in Australia’s energy landscape. The growth of coal seam gas (CSG) production has been particularly notable, with production reaching over 600 petajoules in 2022. Furthermore, ongoing investments in infrastructure, such as pipelines and LNG facilities, are enhancing export capabilities, positioning Queensland as a vital hub for both domestic and international energy supply.

Australian Capital Territory Oil and Gas Upstream Market Drivers

The Australian Capital Territory (ACT) oil and gas upstream market is driven by a focus on renewable energy and sustainability rather than traditional fossil fuel extraction. While there are no major oil and gas operations within the ACT, companies like ActewAGL play a pivotal role in promoting cleaner energy alternatives. The government's commitment to reducing greenhouse gas emissions and transitioning to renewable sources creates opportunities for innovative energy solutions. This shift encourages investment in technologies that support energy efficiency and sustainability, influencing the region's energy landscape.

Western Australia Oil and Gas Upstream Market Dynamics

Western Australia oil and gas upstream market is characterised by robust exploration and production activities, particularly in regions like the Carnarvon Basin and the Browse Basin. The state boasts around 70% of Australia's oil reserves and significant natural gas resources, attracting major investments from international companies. Key players like Woodside Energy and Santos are actively involved in developing offshore projects and expanding LNG capabilities. Additionally, advancements in technology and a focus on sustainability are shaping operational strategies, positioning Western Australia as a leader in the energy sector.

Competitive Landscape

Australia upstream oil and gas market players adopt a very aggressive stance for increasing efficiency in exploration and production with sustainable production. They not only invest in advanced technologies that allow them to successfully extract resources with reduced impacts on the environment but also look at opportunities for natural gas and renewable energy. This is so that the Australia upstream oil and gas companies can position themselves better for the movement toward a low-carbon economy for Australia and face increased domestic and international needs for energy.

Key Industry Players

Chevron Australia Pty Ltd.

Established in 2000, Chevron Australia is an oil and gas exploration and production company headquartered in Perth and operating primarily on the Gorgon and Wheatstone projects. The company considers innovation and sustainability as of utmost importance so that reliable energy is provided with the minimum environmental impact through leading-edge technologies and efficient practices.

Shell Australia Pty Limited

Shell Australia was founded in 1901 and is headquartered in Brisbane. It is one of the biggest players in the oil and gas upstream industry. The company explores, produces, and develops oil and gas resources, focusing much on LNG projects that seek a low-carbon future. BP Australia Pty Limited

BP Australia Pty Limited

BP Australia is an oil and gas exploration, production, and refining company that was established in 1919 and is based in Melbourne. BP Australia develops cleaner energy solutions and invests in natural gas projects to increase the supply that meets demand, which the company will pursue for sustainability and a reduction in carbon emissions.

Origin Energy Limited

Origin Energy was established in 2000 and is headquartered in Sydney. Its business segments include gas exploration and production and renewable energy projects. Significant gas fields and LNG facilities are operated with the objective of providing a reliable source of energy while moving toward a sustainable energy future based on demand in the market.

Other Australia oil and gas upstream market key players are ExxonMobil Australia Pty Ltd., Woodside Energy Group Limited, Santos Ltd., Beach Energy Limited, and INPEX Corporation, among others.

Recent Developments

August 2024

Arrow Energy, a 50% owned joint venture between Shell and PetroChina, has approved plans to develop Phase 2 of Arrow Energy's Surat Gas Project in Queensland, Australia.

July 2024

Australia is poised to finalise new offshore exploration permits for gas supply and carbon capture and storage. This initiative is expected to enhance the nation’s economy and support its energy transition goals, as noted by the Ministers from the Department of Industry, Science and Resources.