CRITICAL ISSUES IN DRILLING & COMPLETIONS
A pair of workers inspect a turret on the Pyrenees FPSO, located in the shallow-water Pyrenees field offshore Western Australia.
The Australian Energy Producers has pressed for an increase in the development of Australia’s gas field s, noting the signifi-
cant role that natural gas will have to play in the energy transition. The association is focusing much of its efforts on com-
municating that message to policymakers and hopes it will translate into supportive reforms.
agreements were not able to be made dur-
ing this period because of the uncertainty.
That’s had a really big impact on the East
Coast market.
In parallel, we’ve had changes to
the Australian Domestic Gas Security
Mechanism, which provides the govern-
ment with the option to interrupt LNG export
contracts if supply to the domestic market
is considered inadequate. These changes
have caused some concern for interna-
tional partners who rely on our gas to keep
their lights on. We’ve also had changes to
the Safeguard Mechanism – this is about
industrial emissions reductions that apply
to LNG facilities – and to the taxation and
environmental approvals regimes. There
has been a whole suite of changes and
reforms in a relatively short span of time
that have added to the uncertainty and the
cost of operations in Australia.
32 Still, I believe it’s inescapable that we
will need more gas for the energy transi-
tion, both domestically and across our
region, so I’m confident that we will be
able to overcome some of the challenges
we’ve seen. We just need to create a more
supportive approvals environment as that
will be key to attracting new investment
and developing that gas supply.
Currently, approvals are taking far too
long when we consider the timeframe
in which we’re targeting our net-zero
goals. We just can’t afford to have approv-
als processes for our projects take years
and years. We need much greater clarity
around that. We also need to minimize ad
hoc interventions in multi-million-dollar
investments. We need policies that provide
stability and certainty so that companies
have confidence to invest.
You’ve been vocal about the impor-
tance of the oil and gas industry being
leaders in Australia’s energy transition .
What would you like to see the indus-
try d o?
Again, it’s important to recognize that,
even when we’re talking about net zero,
that doesn’t mean that fossil fuels disap-
pear. Even in the International Energy
Agency’s (IEA) net-zero pathway, by 2050
we’re still going to see 20% of the energy
mix being met by fossil fuels, and gas is
going to be a key part of that.
In addition to that ongoing role for gas
production, there will also be a broader role
for our industry in supporting emissions
reductions. Low-carbon hydrogen is a key
part of that, as well as carbon capture and
storage (CCS). These technologies are vital
for the transformation, and our industry
JAN UARY/FEB RUARY 2024 • D R I LLI N G CO N T R ACTO R