On Thursday, the federal government in Canberra invited bids for five offshore oil and gas exploration areas in the Otway Basin off Victoria, its first offshore acreage package since 2022. The blocks sit in Commonwealth waters, and bidding is now open, with applications due by June next year.
This national release follows a separate tender announced a day earlier by the Victorian government for acreage in state waters. At the peak of recent offerings in 2020, the government put more than 40 offshore areas – many off northern Australia – up for bidding, compared with just 10 areas made available in 2022.
Policy makers expect the east coast gas market to face supply gaps later in the decade. The newly offered Otway areas are not expected to deliver commercial gas output within that timeframe, but Canberra sees additional exploration as one way to help address potential shortfalls further out.
Resources Minister Madeleine King said exploration activity and new discoveries would continue to play an important role in meeting Australia’s energy demand and in supporting domestic industry and households as the country pursues its net-zero emissions goals.
The Otway Basin is viewed as a mature oil and gas province rather than a frontier play. It already hosts pipelines and onshore gas processing facilities, providing routes for any future discoveries to be tied back to existing infrastructure.
Separately, the federal government is close to completing its review of the east coast gas market, aimed at tackling domestic supply issues while allowing liquefied natural gas exports from the region to continue.
This week ConocoPhillips (COP.N) and junior partner 3D Energi (TDO.AX) reported a gas discovery in the Otway area and began drilling a second well in their exploration programme. The U.S.-based company also holds a stake in one of three Queensland LNG export consortia being examined by the Australian government.
Samantha McCulloch, chief executive of industry group Australian Energy Producers, said this week’s moves by the Victorian and federal governments show that authorities recognise the need for continued exploration to keep new gas supply projects moving forward and meet long-term energy needs.
