BP has decided not to proceed with its exploration drilling programme in the Great Australian Bight (GAB), offshore South Australia.
Claire Fitzpatrick, BP’s managing director for exploration and production, Australia, said that after careful consideration the company concluded that the GAB project “will not be able to compete for capital investment” with other upstream opportunities in its global portfolio in the foreseeable future.
“We have looked long and hard at our exploration plans for the Great Australian Bight but, in the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals,” Mr Fitzpatrick said.
“After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight.”
The decision comes after BP conducted a thorough review of its upstream strategy earlier this year, which found that the company would be better off to focus its exploration efforts on opportunities likely to create value in the near to medium term, primarily building on its significant existing upstream positions.
“This decision isn’t a result of a change in our view of the prospectivity of the region, nor of the ongoing regulatory process run by the independent regulator NOPSEMA. It is an outcome of our strategy and the relative competitiveness of this project in our portfolio,” Mr Fitzpatrick added.
He said BP has already communicated its decision to the federal and state governments.
“This decision has been incredibly difficult and we acknowledge it will be felt across the South Australia region. We have made significant progress with preparations for drilling in the Bight with the support of communities and federal, state and local governments,” he said.
“We acknowledge our commitments and obligations and our priority now is to work with government and community stakeholders to identify alternative ways of honouring these.”
BP has also informed its joint venture partner, Statoil that it will not be proceeding with exploration drilling, adding that the company “fully understand BP’s change in strategic direction and accept BP’s decision”.
“BP is a long-term, significant investor in Australia, most visibly through our retail network and refinery and also as partners in the North West Shelf and Browse ventures,” Mr Fitzpatrick continued.
”We expect to continue to consider further opportunities to invest and grow our business here.”