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Chevron pulls plug on Bight venture

US company had a drilling commitment for next year covering four wells worth up to A$400m

Chevron has followed in BP’s footsteps by deciding to withdraw from a deep-water exploration venture in Australia’s frontier Great Australian Bight.

The company holds 100% interest in Blocks EPP44 and EPP45 which were awarded four years ago.

Chevron acquired 3D seismic data in 2015 and had been working on the processing and interpretation of that data.

Chevron said in a statement it was committed to Australia on a long-term basis, but the Great Australian Bight, in the current low oil price environment, was not able to compete for capital in Chevron’s global portfolio.

The company said the Bight remains one of Australia’s most prospective frontier hydrocarbon regions.

Chevron added: “Offshore Western Australia is a global focus area for Chevron where we have access to vast natural gas resources and existing infrastructure."

“We have invested billions of dollars in Western Australia to commercialise our large gas resource base through the Chevron-operated Gorgon and Wheatstone LNG and domestic gas facilities and expect to be here for decades to come."

The Australian oil and gas association APPEA said Chevron’s decision to not continue in the Bight was “disappointing”.

“Chevron has made clear its view that the resource potential of the Great Australian Bight remains significant but their decision is a reminder that much-needed investment in developing Australia’s energy resources cannot be taken for granted,” said APPEA’s director for South Australia, Matthew Doman.

Doman added that success in the Bight “would ease Australia’s reliance on imported oil and deliver the state much-needed new investment and jobs”.

Chevron had made a A$400 million commitment to the Australian government to drill two wells in each permit by 21 October 2018.

ENDS