Norway's Equinor has shelved an oil exploration project in the Great Australian Bight, becoming the third supermajor to give up on the Bight amid a challenging environment and strong environmentalist opposition.
Australia's ABC reports that the Norwegian company concluded that the plan it had for the Bight was less commercially competitive than other locations.
"We have received bids for the drilling rig, the helicopters, the supply base - the cost for these activities is just too high and too expensive to go ahead and drill the well," said the manager of Equinor Australia.
BP was the first oil major to give up on the Bight, after it spent millions on preparatory work while awaiting the approval of the $600-million project from Australia's oil industry regulator, Nopsema. The watchdog made BP's life difficult by twice rejecting the supermajor's drilling plans for the Bight, insisting it disclose more details about its environmental protection program. Eventually, BP gave up and left, handing the reins to Equinor.
At the time, the Norwegian company was upbeat about its prospects in the Bight.
"We have a good understanding of the geology in our licence area, based on high-quality 3D data analysis. We believe there could be an active petroleum system within our permit area and we are now positioned to test this potential under favourable market conditions for exploration drilling," Equinor's vice president of exploration for Australia said at the time.
There has been no oil and gas exploration in the Great Australian Bight since 2003, and all the wells drilled in the region previously have come up dry. However, Wood Mackenzie estimates suggest that the area could hold 1.9 billion barrels of crude oil and natural gas.
Equinor, used to operating in harsh climatic environments, could have been better suited than BP and Chevron-which left the Bight soon after BP-to try its hand at the Great Australian Bight, yet it seems the challenge proved too great for the Norwegian company, too.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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