Macfarlane was widely expected to be appointed following the change of government in the 7 September election.
Macfarlane was the resources and energy minister from 2001 to 2007 during the Howard government years.
"Mr Macfarlane’s experience and record of success will be invaluable as we seek to build more competitive industries across Australia," said Prime Minister Tony Abbott.
The Australian Petroleum Production & Exploration Association (APPEA) congratulated Macfarlane, saying he has "a deep understanding" of Australia’s oil and gas industry, its importance to the nation’s economy, and its increasing importance on the international energy stage.
“APPEA