According to information gathered by the Department of Mines, Industry Regulation and Safety, the WA petroleum sector accounted for 18 per cent of the total value of mineral and petroleum sales in Western Australia in the 2016-2017 financial year.
This staggering number makes the sector - including crude oil, condensate, LNG, natural gas and LPG - as the second most valuable sector for the State after iron ore.
As a whole, the sector was valued at $19.1 billion in 2016–17, an increase of five per cent from $18.1 billion in 2015–16.
The volume of LNG produced in Western Australia has increased 45 per cent during the past five years with production reaching a record 28.7 million tonnes in 2016–17. This follows the startup of the Gorgon LNG project as well as record production from the Woodside-operated North West Shelf and Pluto LNG project.
LNG is Western Australia’s most valuable petroleum product, accounting for 12 per cent of the value of the State’s mineral and petroleum sales in 2016–17. The value of LNG sales value rose from $10.8 billion in 2015–16 to $12.7 billion in 2016–17.
In 2016–17, crude oil volumes were down almost 30 per cent to 5.4 gigalitres, while condensate production decreased 11 per cent to six gigalitres. Based largely on the fall in volumes, the value of crude oil and condensate sales fell for the sixth consecutive year to $4.3 billion, a decrease of 18 per cent.
The value of projects under construction or in the committed stage of development was an estimated $99 billion, down slightly from $100 billion in March earlier this year. The number of planned or possible projects also declined from $52 billion to $49 billion over the same period. These changes are attributable to several projects being completed, progressed, or placed on hold due to the prevailing market conditions.
Following the expected start-up of Chevron's Wheatstone project in the near future, Shell's Prelude FLNG project and Inpex's Ichthys LNG will be the last two of Western Australia's wave of new LNG supply projects to come online. Both are expected to start production in 2018. However, the completion of major projects such as these will see a substantial decline in the total value of the State’s projects in the investment phase.
National petroleum expenditure continued to decline, down from $1.8 billion in 2015–16 to $1.4 billion in 2016–17. Western Australia typically attracts around 70 per cent of Australia's petroleum exploration spend however this dropped to 47 per cent this period. The decrease in the State's share is due to Quadrant's aggressive 2016 drilling campaign ending at prospects in Western Australia and the start-up of a drilling campaign by ConocoPhillips at the off the coast of the Northern Territory.
Petroleum royalty receipts were significantly down for the year, declining by almost 53 per cent from $7.2 million in 2015–16 to $3.4 million in 2016–17. It should be noted that royalty receipts are offset compared to sales value figures. Royalty receipts are reported for the June, September, December quarters 2016 and March quarter 2017.
The State also received grants for North West Shelf projects which accounted for 10 per cent of Western Australia’s royalty receipts with $573 million.
Note: statistics taken from DMIRS 2016-2017 statistics release